
Copyright N°_^ll 



COPYRIGHT DEPOSIT. 



An Essay 



ON 



The Distribution of 
Livelihood 



BY 

Rossington Stanton 



New York and London 

C. O. Farwell 
1908 






LIBRARY Of CONGRESS 
[wo copies Keenly*.! 

MAY 20 1908 

aupyriffii entry ^ 

Bio (S W<*1 

0LA«* A XXc, No. 
COPY B. 

ii iii*' iTimr ■ ~nj 






Copyright J. 9 7, by 
ROSSINGTON STANTON 



CONTENTS 

Page 

CHAPTER I. Introductory . . . 11 

Current principles of production do not admit of 
distributive equity, except as the latter rests upon 
those principles. 

The distributive reform now recommended, i. e., 
the restriction of laboring population, inefficacious 
because of the proclivity of production to require 
fewer workers proportionately. 

The base upon which current principles are ap- 
plied contains an inequitable feature in the uncon- 
ditioned tenure of land, which permits the latter 
to be withheld from production, though it would 
otherwise naturally be productively occupied. 

A certain method of economic analysis should 
begin at the soil, instead of from an accumulation 
of capital as at present. 

CHAPTER II. ...... 17 

The first principle of production is necessity. 

The second is the reservation of sufficient of the 
product of the soil to generate its succession. 

The third is that it must follow the channel of 
consumption. 

These three principles surround the base of pro- 
duction, and the first principle of its expansion 
seems to rest in the efficiency of labor. 

Expanding production appears to rest, second- 
arily, in the operation of the foregoing principles 
and populative increase. 

All of these principles converge into natural con- 
ditions. 

Under the principle of labor division population 
divides into two. orders: those engaged directly on 
the land and those employed in artisan, commercial 



4 CONTENTS 

and professional occupations; and as the second is 
the outflow of the first, the distributive relation of 
population to production can best be studied from 
this aspect. 

Population divides into these two orders accord- 
ing to the conditions of production. 

The second can only arise by reason of the aug- 
menting efficiency of labor. 

This, on the soil, expresses itself in an increased 
yield and an increased pro rata area; and off the 
soil, in similar conditions. 

The result is that population must overflow onto 
new land. 

The foregoing principles reconsidered in their 
bearing to the general modification of natural con- 
ditions, i. e., the sixth principle of production. 

The increase of population and the increase of 
labor efficiency similar in their distributive effect, in 
that the second, like the first, eventually produces a 
condition of seeming over-population. 

Not only, accordingly, must population be regu- 
lated to the capacity of the productive organism, 
but the effect of expanding labor efficiency must be 
neutralized. 

The operation of demand considered. 

CHAPTER III 34 

The principles of production examined for their 
distributive bearing, which is found to rest in the 
valuation of labor. 

Labor must begin its application upon the soil, so 
that it is land that constitutionally governs its value. 

But under the division of labor, it applies itself 
off the land, so that the latter must exercise its in- 
fluence by a comparative process. 

Moreover as, under the course of events, labor 
comes to be applied beyond the scope of either pro- 
cess of valuation, its value is determined by com- 



CONTENTS 5 

petition wholly unmodified by the principle of con- 
stitutional valuation. 

The difference between this last value and that 
conferred by the comparative influence of land, is 
Interest. 

That between this comparative valuation and the 
direct value conferred by land, is Rent. 

Labor thus has three gradations of value, the last 
of which, under the conditions of labor application, 
is a common distributive value of all three. 

To bring this distributive value to a level with the 
actual value of labor, the comparative ratio of the 
third species of labor application, which is altogether 
constituted of hired labor, must be raised. 

This can only be done by restricting its daily 
application. 

But this value cannot be raised above the lowest 
land under production, so that rent, as it exists 
above such, cannot be eliminated in this manner. 
Taxation must therefore be resorted to. 

With the distributive value of labor at its highest 
point, if livelihood is not above the standard of com- 
fort, population is at its full expansion, and must be 
held in check. 

CHAPTER IV 47 

Objection will be made that if the hours of labor 
are restricted, and wages raised as a result, the in- 
centive to save will be weakened, and production 
accordingly languish. 

The principle of saving has but a subordinate 
operation, is compelled to that extent by necessity, 
and cannot possibly exceed it. 

The saving is made by those directly interested, 
and cannot be made by anyone else except under 
extraordinary conditions. 

The accumulation of money does not represent 



6 CONTENTS 

this saving, and its only effect is to augment pro- 
ductive competition. 

The operation of money considered. 

The regulation of population considered. 

CHAPTER V 67 

Recapitulation, having in view the adjustment of 
population to the productive organism. 

Conditions surrounding the overflow of popula- 
tion onto new soil. 

Its necessity manifested by the presence of in- 
equitable livelihood, barring rent, which is a natural 
circumstance of unequal soil fertility. 

But, though its necessity is indicated by interest, 
the absence of interest does not necessarily show 
the necessity removed. 

The origin and estimation of interest considered. 
This may seem to support the current idea of 
unproductive consumption, to the detriment of pro- 
ductive consumption. 

But unproductive consumption can only take place 
in commodities that have passed through the pro- 
ductive organism and which are wholly impossible 
of reproduction, being in their final state, and can- 
not, accordingly, in any way affect the volume of 
production. 

The effect of the elimination of rent and interest. 
No definite conclusion can be drawn by investi- 
gating the productive organism from the surface; 
nor, with rent and interest removed and livelihood 
consequently on an equitable basis, can it be pre- 
estimated whether its conditions would be satisfac- 
tory or otherwise. This must be judged from direct 
observation. 

CHAPTER VI 89 

Summarizing, rent and interest should be elimi- 
nated from the productive organism. 



CONTENTS 7 

The former, as it exists in materialized form, may 
be unhesitatingly absorbed, but beyond this care 
should be exercised not to burden soil production, 
as this is the source of all production. 

The regulation of population will be denounced, 
but the conditions of human existence require it. 

A prerequisite the international unity of society. 

APPENDIX . . . .. . . .97 

INDUSTRIAL DEPRESSION . . .111 

A SUGGESTION ON EDUCATION . . 119 
THE NEGRO ........ 123 



AUTHOR'S NOTE 

This essay is issued as a preliminary outline 
of several economic principles that so far as 
I am aware are wholly novel. It is my inten- 
tion to elaborate these principles when oppor- 
tunity permits, but as there is no immediate 
prospect of my being able to do this, I have 
considered it advisable to give them publicity 
in their present form, in the hope that they 
may strike root in the mind of someone with 
leisure to establish their correctness, and also 
to secure them from possible oblivion in the 
event of my unexpected decease. 



The Distribution of Livelihood 



An Essay on the Distribution 
of Livelihood 

CHAPTER I. 

Introductory 

The interactionary principles that are now 
assumed to underlie production preclude the 
possibility of a distributive equity except as 
governed by these principles. That is to say, 
an accumulation of capital is premised as the 
prerequisite of production, and the volume of 
this accumulation is assumed to rest mainly on 
the revenue that it will return, this furnishing 
the principal incentive to make the saving. 
Consequently it is impossible to accord to the 
complaining class of the distributive orders a 
11 



12 DISTRIBUTION OF LIVELIHOOD 

larger share in the total volume of production 
than falls to it naturally, for the reason that 
this would reduce the revenue that acts as the 
main incentive to accumulation, and therefore 
by tending to decrease this, tend likewise to 
decrease the volume of production itself. 
Accordingly there is but one recommendation 
that the economist can give to the complaining 
order, namely, that it should restrict its num- 
bers in order to increase the pro rata distri- 
bution to its members. 

This recommendation is inefficacious upon 
two counts. In the first place, the steady ten- 
dency of production to effect its purpose with 
the utilization of a proportionately fewer num- 
ber of workers operates to neutralize the effect 
that might otherwise be produced by a re- 
duction of the number of the latter. In the 
second place, the number of workers cannot 
be altered without affecting the rate of revenue 
and therefore the dimensions of the fund of 
capital out of which it is assumed they are 
being maintained. This revenue is the differ- 
ence between the volume produced minus rent, 
and the share of the workers, and this share 
is determined by the competitive ratio of the 



DISTRIBUTION OF LIVELIHOOD 13 

latter to the volume of capital which forms, 
in its productive destination, their fund of 
maintenance. Now if, by reducing the number 
of workers, this competitive ratio is advanced, 
the rate of revenue will be correspondingly 
lowered, thereby decreasing the accumulation 
of capital, and therefore the volume of produc- 
tion that furnishes the fund of laborer sub- 
sistence, and bringing things back to their 
former level. 

These simple but, I believe, wholly irrefrag- 
able criticisms of the distributive reform now 
recommended by the standard conclusions of 
political economy indicate the impotency of 
the recommendation noted to effect the dis- 
tributive reform demanded by society, in the 
light of current principles of production. 

A still more unsatisfactory condition is pre- 
sented when the principles of production are 
examined for their own sake. For here is 
found an inequitable element at their very 
inception, in that land held under uncondi- 
tioned tenure requires a greater incentive to 
bring it under production than when held 
under what surely everyone must concede is 



14 DISTRIBUTION OF LIVELIHOOD 

a proper and necessary condition, namely, that 
it shall be brought under production by the 
owner, or be otherwise free to the productive 
occupancy of any who will bring it under pro- 
duction. Surely no one will maintain that 
there can possibly exist the right to hold land 
idle while there are those who suffer because 
of its non-productive occupancy; and if this is 
admitted, then it is at once clear that the whole 
fabric of current economics is permeated by 
an inequitable premise. 

For Mr. Smith did not presume to interfere 
with the productive structure. Premising an 
accumulated stock, he argued that this would 
be applied reproductively for a revenue, or be 
consumed unproductively. Now, under a 
state of unconditioned land tenure, it is plain 
that a considerably greater revenue must be 
forthcoming to extend production upon un- 
occupied land than would be the case where 
the soil is free to productive occupancy. For, 
in the first case the landlord will always require 
a profit or rent over and above the return to 
the producer, whereas, in the second, the latter 
would be content with such return. Land, 
accordingly, held under unconditioned tenure, 



DISTRIBUTION OF LIVELIHOOD 15 

will always require a greater return to bring 
it under production than where its tenure is in 
accord with equity. 

It is clear, therefore, that production, as at 
present considered, requires a greater incentive 
than would be the case if land were held under 
a just system of tenure, namely, that it either 
be engaged in production by the holder, or 
relinquished to those who will engage it in 
production; and that current principles of pro- 
duction, and the distributive principles deduced 
from them, are consequently vitiated to a 
greater or lesser degree. 

Another and still more important criticism 
may be made of the method of analysis now 
adopted, namely, that it starts from an ad- 
vanced stage of production, that is, after an 
accumulation of stock has been made, rather 
than at the initial application of labor to the 
earth's surface, where, surely, a certain and 
comprehensive investigation must begin. 

I shall endeavor, in the following chapters, 
to annunciate the principles of production as 
they appear to exist under a perfectly natural 
and just occupancy of the soil, and thereafter 
to deduce and give practical application to the 



16 DISTRIBUTION OF LIVELIHOOD 

principles of distribution as they may appear 
therefrom. 



CHAPTER II. 

If we inquire what are the principles that 
underlie the production of livelihood, we shall 
find that the first is necessity. It was necessity 
that compelled the gathering of even those 
spontaneous products that must have furnished 
the first subsistence of man, and so it was the 
same motive that, when these spontaneous 
products were exhausted, compelled him to 
begin the cultivation of the soil and the domes- 
tication of animals. The scope of this prin- 
ciple must be the satisfaction of his wants. 

But as, to begin such cultivation, he must 
have reserved out of his accumulation of such 
spontaneous products sufficient for seed, so 
he must likewise reserve out of the yield of the 
latter sufficient for the succeeding planting. 
This seems to be the second principle of pro- 
duction, that a sufficient portion of the product 
of the soil must be reserved from consumption 
to generate its succession. 

The third principle of production appears to 
be that it must follow the channel of con- 
17 



18 DISTRIBUTION OF LIVELIHOOD 

sumption. It was the demand for food that 
in the first instance directed its procuration 
rather than iron ore, for example, and so it 
must be demand that directs the comparative 
production, as conditions permit, of all the 
remaining commodities of livelihood. 

These seem to be the conditions that sur- 
round the beginning of production, and if we 
now seek the principles that regulate its 
growth or expansion we shall find the first to 
rest in the efficiency of labor. For were the 
efficiency of labor not greater than the require- 
ments of food production, production could 
never by any possibility have extended beyond 
this basic necessity of subsistence. Not even 
the rudest huts could have been built, nor 
clothing made. But as the yield of food in- 
creases to the labor applied, more labor can 
be spared for growing or gathering other 
products of the soil and working them up into 
supplemental subsistence. And so, accord- 
ingly, as the efficiency of labor augments, the 
conveniences and eventually the luxuries of 
livelihood are enabled. 

The growth of production appears to rest, 
secondarily, in the operation of the foregoing 



DISTRIBUTION OF LIVELIHOOD 19 

principles and the increase of population. For, 
in the satisfaction of his desires man will tend 
to intensify his labor upon any certain area 
and expand his labor over a broader area, and 
an increasing population must, other things 
remaining equal, force production over a wider- 
area. 

All of these principles converge, naturally, 
into the conditions of climate and soil amid 
which production is environed, and are subject, 
to a greater or lesser extent, according to the 
circumstances of the case, to them. No more 
food can be produced than the capacity, extent 
and character of the soil will permit, and so 
with all the commodities of livelihood. Like- 
wise, as the demand for food increases, some 
other form of production must, all things re- 
maining unchanged, give place to it, and so on. 
Climate not only influences to a considerable 
degree the application of labor and the desires 
of mankind, but it regulates very largely the 
character of the product of the soil and the 
volume and rapidity of its yield. 

If, following the general course above indi- 
cated, we observe the progress of production, 



20 DISTRIBUTION OF LIVELIHOOD 

we shall, beginning at that state of livelihood 
procuration which consists in merely gathering 
the spontaneous products of nature, note the 
small needs of such a condition of life. But 
with the commencement of tillage there is 
required a more stable mode of life, bringing 
the need for substantial habitations, household 
utensils, implements of tillage, enclosures for 
domesticated animals, all of which, facilitated 
by the more abundant and regular supply of 
food which must have resulted from tillage 
over the irregular methods theretofore prevail- 
ing, must have given a strong impetus to that 
proclivity to labor division to which the great- 
est efficiency of labor is due, and which, in its 
turn, by well-known processes, reacts upon the 
capacity of labor in the various channels of its 
extending application. With this growing 
ease of procurement must have gradually 
grown up, under the progress of events, those 
manifold wants which constitute modern live- 
lihood, and for which the necessary industry 
is willingly given. 

Thus briefly, for the moment, observing the 
operation of the first and fourth principles 
annunciated, and under which the second 



DISTRIBUTION OF LIVELIHOOD 21 

proceeds necessarily and the third voluntarily, 
we shall note, as we take up the fifth, that 
population may very greatly increase, under 
the augmenting efficiency of labor, without 
widening the area of production. Under the 
operation of labor division, population tends 
to rise above the soil, so to speak, in the refine- 
ment of its raw products, in the exchange of 
both raw and manufactured products, and in 
professional occupations. Thus the soil main- 
tains two layers of population, if I may so 
express it, the first occupying the land in direct 
production and the second engaged in the 
refinement and exchange of such production; 
and as the second, which congregates and 
forms our villages, towns and cities, naturally 
arises according to the circumstances of the 
productive organism, production, in its dis- 
tributive relation to population can, probably., 
be best studied from this aspect. 

It is probable, as I have just observed, that 
population divides into these two orders ac- 
cording to the conditions of production. In 
the beginning all must have belonged to the 
first, but as the division of labor develops the 
second gradually arises. Thus as, at the start, 



22 DISTRIBUTION OF LIVELIHOOD 

the principle of labor division probably ex- 
hibits itself in arrow and spear makers, and 
hut builders perhaps, and is augmented, when 
tillage commences, by makers of agricultural 
implements, house builders, furniture and 
clothing manufacturers, its development, by 
bringing a class who furnish these with the 
materials of their labor, thereby wholly separ- 
ating them from direct connection with the 
soil, places them in a separate order according 
to the distinction I have noted. 

This second order can only arise by reason 
of the augumenting efficiency of the labor of 
the first; for, that a separate class of arrow or 
spear makers can exist, the food producing 
capacity of the hunters must be not only great 
enough to subsist themselves, but the arrow 
and spear makers as well. That, moreover, 
there may be a separate class of hut builders, 
food must be produced by the hunters in suffi- 
cient quantity to subsist them also; and that 
both weapon makers and hut builders may 
separate themselves altogether from the soil, 
food must be afforded by the hunters for still 
another class of wood and material producers, 
or, what amounts to the same thing, the 



DISTRIBUTION OF LIVELIHOOD 23 

hunters must spare the time to gather or 
produce these themselves. 

Now, in the augmenting efficiency of labor 
two operations take place. In land produc- 
tion, the yield increases to the area, and the 
area itself extends. Thus if, in a rude state of 
tillage, a man were able by the use of crude 
tools to produce a scanty yield from several 
acres of land, under modern methods of agri- 
culture he is able to not only multiply the pro- 
portionate yield, but to handle many times that 
area of soil. The result is that the order of 
landless population increases, under the pro- 
cess just noted, in corresponding proportion. 
This increase is drawn from the soil popula- 
tion, and even the increase of population may 
be absorbed into the productive organism 
without necessitating a wider basis of land. 
But, finally, the increase overtakes the employ- 
ment capacity of landless occupation, which 
mainly consists of the refinement and exchange 
of the materials abstracted from the soil, and 
its overflow becomes necessary. For, it will 
be observed, the same process of expanding 
labor capacity and occupancy which is taking 
place in land production is also going on in 



24 DISTRIBUTION OF LIVELIHOOD 

landless production. Thus the same quantity 
of labor that would have produced a chair, for 
example, will, under modern methods, produce 
half a hundred, and will, likewise, consume half 
a hundred times more material. 

This overflow, when land is readily avail- 
able, is a natural and voluntary process. Man 
seems to have an inherent desire to occupy 
unoccupied land, if it is fertile, and a few seeds 
and tools and enough food and clothing to 
subsist him until the return from planting 
comes in is all that is required to begin its 
occupancy. If such land adjoins that already 
under occupancy, and is habitable, its occu- 
pancy will voluntarily take place. If, on the 
contrary, it is distant, or presents obstacles to 
settlement, it would seem to be the duty of 
the state to provide for the expansion of an 
increasing population by removing, where 
possible, extraordinary obstructions to occu- 
pancy. 

We have now reached the sixth principle of 
production, namely, conditions of climate and 
soil, and as these environ and influence those 
already considered, the latter must be recon- 



DISTRIBUTION OF LIVELIHOOD 25 

sidered as they connect with this general 
modifier. 

If, accordingly, we suppose a warm climate 
and a fertile soil, we shall see that the needs 
of livelihood under such conditions are natur- 
ally very simple. Food constitutes the chief 
requisite, for climatic conditions render houses 
and clothing of secondary importance. This 
the soil yields abundantly and with great 
rapidity. The heat inaisposes to arduous in- 
dustry, which, combined witL the simplicity 
of livelihood, operates against the development 
of labor efficiency. But under such easy con- 
ditions of subsistence procuration and in such 
a climate, population rapidly increases. This, 
moreover, because of the small development of 
labor division is not able to rise above the soil 
in any great proportion in what I have termed 
landless production, but is obliged to spread 
itself over the land in direct occupancy. The 
result is that the land available for occupancy 
is quickly taken up, after which the increase 
of population distributes itself over that 
already occupied as best it may. 

If we suppose a colder climate and a less 
fertile soil, we shall see that the needs of exist- 



26 DISTRIBUTION OF LIVELIHOOD 

ence are here more complex. Not only is a 
greater quantity of food necessary to sustain 
life, but substantial habitations and warm 
clothing arc imperative to withstand the rigors 
of climate. The soil does not naturally yield 
its product so readily, nor so rapidly, and more 
industry is required in its cultivation. Under 
such conditions the efficiency of labor increases 
— indeed it is probable that it must have 
reached a fair state of efficiency before such a 
section could be occupied — and it is further 
stimulated by the energy which a temperate 
climate imparts to industry. Because of the 
greater difficulties of subsistence population 
does not tend to increase so rapidly, nor does 
the increase, because a greater proportion of 
population is enabled to rise above the soil by 
reason of the development of production, so 
quickly appear in the nature of an excess. 

Yet, eventually, this takes place; and it is, 
indeed, ultimately hastened by the identical 
operation that at first prevented it. For, be- 
yond the increasing efficiency of labor which 
finds its expression in an increased proportion- 
ate yield from the soil, its expression is through 
the medium of expanding acreage. Now the 



DISTRIBUTION OF LIVELIHOOD 27 

effect of this is to reduce the capacity of the 
soil for direct population, a>nd the latter accord- 
ingly flows into the landless division of pro- 
duction; but here, also, the increasing effi- 
ciency of labor is finding its expression in an 
expanding pro rata occupancy of the materials 
and occupations of which it is composed. Ac- 
cordingly, a corresponding proportion of pop- 
ulation finds itself pressed for a field of occupa- 
tion, just in the same manner as if there had 
been an increase of citizens to that extent. 

In fact, in their ultimate results, the increase 
of population and the increasing efficiency of 
labor are exactly identical from a distributive 
point of view. Thus if we suppose a certain 
area of land thinly populated but with popula- 
tion increasing, and where the efficiency of 
labor is at a complete standstill, we shall 
readily see that when population reaches the 
occupancy capacity of the land, it cannot in- 
crease without subdividing the soil, thereby 
reducing its pro rata livelihood, or by sub- 
occupying it, with the conditions, to be here- 
after considered, resulting from that process. 
On the other hand, if we suppose the same area 
with population at a standstill, but the effi- 



28 DISTRIBUTION OF LIVELIHOOD 

ciency of labor augumenting, we shall see that 
the expanding occupancy units of the latter 
will, as the process is continued, force a corres- 
ponding proportion of population out of occu- 
pancy and bring about the same conditions as 
in the first case. 

Naturally, to prevent such consequences, 
population must., after the bounds of reason- 
ably habitable land have been reached — for up 
to that point, as I have observed, it will auto- 
matically overflow and care for its increase- 
be restricted to the occupancy capacity of the 
productive organism ; and then, from that 
point, the productive organism must be ad- 
justed to population by restricting the occu- 
pancy limits of labor, not, indeed, by arresting 
the progress of labor efficiency, which would 
be absurd, but by reducing the hours of labor 
application, under which plan a condition of 
general leisure must spread itself over society. 

It was, indeed, the recognition that if the 
labor of a society could be equally apportioned 
amongst its citizenship a condition of equitable 
distribution, based upon the quality of services 
rendered, must result, barring rent, (for this, as 
will hereafter appear, would not be affected), 



DISTRIBUTION OF LIVELIHOOD 29 

that inspired this essay. There is, however, 
no manner by which labor, in its entirety, can 
be thus apportioned.. The different characters 
of soil, intermingling in countless variety, pro- 
hibit any uniform division of land, and even 
were this possible, it would interfere with the 
progress of labor efficiency, one of the most 
important features of which is the expanding 
area of pro rata ^and occupancy. As, more- 
over, we pass from the land to landless pro- 
duction, that is, the refinement and exchange 
of land materials, the difficulty is still more 
pronounced. For here, the whole field of com- 
merce extends itself before every worker and 
its division is altogether impossible, for a few 
minutes of daily direction might readily suffice 
for the master regulation of an enterprise of 
worldv/ide proportions. It is because of this 
unlimited scope of application that labor em- 
ployed in commercial occupations is enabled 
to secure for itself an extensive return, whereas 
in land production its scope of application is 
limited by the area controlled. 

Resuming the thread of analysis, I will direct 
more particular attention to the operation of 
demand upon the constitution of production 



30 DISTRIBUTION OF LIVELIHOOD 

as it follows the channel of consumption. Now 
just as the demand for food increases the soil 
must be given over, except as its augmenting 
proportionate yield may equalize the increase, 
to food production; and just as the soil is thus 
given over, some other form of production is 
restricted. Accordingly, as population, which 
furnishes the demand for food, increases, the 
demand for food augments, and, finally, as 
all the land is utilized for food production, all 
other forms must cease, and livelihood must 
consist altogether of food, and such products 
as might be formed of its non-food properties, 
as the hides and wool of meat-bearing animals ; 
but if the food were wholly vegetable, not even 
these would be possible. 

The demand for food does not probably ever 
run to this extreme, for habitations and cloth- 
ing and fuel are also imperative necessities in 
most climates, and the demand for these re- 
serves sufficient soil for the materials of their 
production. The operation of demand is, 
moreover, doubtless influenced by the circum- 
stances of inequitable distribution Which, by 
lodging excess demand power in some hands, 



DISTRIBUTION OF LIVELIHOOD 31 

and withdrawing even necessary demand 
power from others, overthrows its normal 
action. Nor, of course, can all soils be adapted 
to food production. 

China probably furnishes the most conspic- 
uous example of an excessive demand for food. 
Here the soil seems to be given over mostly to 
food production, with the result that this con- 
stitutes the main production of this nation. 
An augmentation of the low state of labor 
efficiency existing among this people would 
produce some remarkable results. For, since 
the soil seems there to have reached its utmost 
yield, the expansion of labor capacity would 
have to take effect in enlarged units of land 
occupancy. If these were to double, one-half 
of the land population of that country would 
be thrown out of occupation. This country 
is, of course, largely overpopulated from the 
standpoint of a condition of livelihood extend- 
ing in any way beyond food and the imperative 
necessities of subsistence, — that is, it is so if 
its soil is assumed to be all under production. 
If its population were but half what it now is, 
and its labor efficiency doubled, as I suppose 
it could easily be by the introduction of agri- 



32 DISTRIBUTION OF LIVELIHOOD 

cultural machinery, half of the soil could be 
given over to other forms of production than 
food, and the pro rata livelihood correspond- 
ingly enlarged and diversified; or, if the soil 
there is especially adapted to food production, 
half of the food produced could be exchanged 
for accessory commodities of livelihood from 
other countries and soils. 

The United States presents an example of 
production under a high state of labor effi- 
ciency, but where population is not yet numer- 
ous enough to monopolize the soil in the pro- 
duction of the necessities of subsistence solely. 
Here the capacity of labor enables food in 
abundance to meet the demand of the native 
citizenship and even for export, to be produced 
by a portion of population, from a portion of 
its land, thus permitting the remainder to 
utilize the balance of the soil in other forms of 
production, thereby producing an opulent and 
diversified livelihood for all its citizens. Here, 
too, now that its desirable land is taken up, 
may be seen the tendency of the augmenting 
capacity of labor to overreach population, as 
is evidenced by the conditions of non-employ- 
ment prevailing in its centers of population, 



DISTRIBUTION OF LIVELIHOOD 33 

and which is a comparatively recent condition. 
England may be noticed as exhibiting an im- 
mense landless citizenship, due to the enor- 
mous development in that country of what I 
have termed the landless division of produc- 
tion. Tropical countries generally illustrate 
the deductions I have made from the basis of a 
warm climate, and European countries those 
deduced from a condition of cold climate. 

It will be observed that I have laid no par- 
ticular stress upon the second principle annun- 
ciated at the beginning of this chapter, namely, 
that a certain proportion of the materials of 
the soil must be reserved to generate the suc- 
ceeding yield. This, as I shall endeavor to 
show in a succeeding chapter, because of its 
absolute necessity, has an automatic operation 
that produces no specific conditions. 



CHAPTER III. 

I have, in the foregoing chapter, taken the 
several principles of production and given them 
what I conceive to be their fair application, but 
though a clear and comprehensive light is 
thereby thrown upon the general features of 
the productive organism, namely, that it is 
motived by necessity, augments under the 
expanding efficiency of labor, and takes its 
character through the medium of demand ac- 
cording to environing conditions, no light 
whatever has been shed upon the principles of 
distribution. It is necessary, accordingly, to 
review these principles with particular refer- 
ence to their distributive aspect. 

In the first place, labor is applied to the 
earth in the gathering or producing of its 
products, and it is the soil therefore that fur- 
nishes fundamental livelihood. The factor of 
reservation contained in the second principle 
of production cannot influence this livelihood, 
for the latter is necessarily the net return from 
the land. The order of production obviously 
34 



DISTRIBUTION OF LIVELIHOOD 35 

has no bearing, and the efficiency of labor 
simply amounts to an augmentation of liveli- 
hood. But in the efficiency of labor the main 
factor is the principle of labor division, under 
which there becomes necessary an exchange 
of the commodities of livelihood, to effect 
which there is required a process of compara- 
tive valuation. Under, moreover, the varied 
species of labor application which the division 
of labor requires, this valuation must be based 
on the value of the labor involved. To ascer- 
tain the principles of labor valuation must, 
accordingly, be the next step in this investi- 
gation. 

If we examine into the manner of labor appli- 
cation in the procuration of livelihood, we shall 
find that it must begin with gathering or pro- 
ducing the materials of the earth which form 
the basis of subsistence and extend into their 
refinement and exchange. Thus there out- 
flows from the soil a stream of labor, so to 
speak ; and if we seek the principle that funda- 
mentally regulates its value we shall at once 
see that it must be the value of labor upon 
land, for since it is upon land that labor is first 



36 DISTRIBUTION OF LIVELIHOOD 

applied, this must be the basic determiner of 
labor value. 

But when we come to apply this principle 
we are confronted by the circumstance that, 
under that proclivity to labor division which 
seems to exist in even the rudest states of 
society, of the laibor thus applied the part which 
extends into refinement and exchange tends 
to separate altogether from direct contact with 
the land, so that the latter can exert its influ- 
ence only by a comparative process. Thus if, 
in the occupancy of a section of land, certain 
of the citizenship voluntarily separate them- 
selves from direct connection with the soil to 
facilitate the procuration of subsistence by 
either making tools, refining raw materials, or 
making exchanges, they would require for 
their labor the same value that it would pro- 
cure them if employed direct to the land, to- 
gether with suitable compensation for any 
extra qualities that might be involved in their 
services beyond what would be required in 
land application; and this is the only possible 
way by which the value of their labor could 
be estimated. But, owing to the differing 
degrees of land fertility, this value must always 



DISTRIBUTION OF LIVELIHOOD 37 

gravitate, under an expanding population, to- 
ward that afforded by land unoccupied, and 
will always be exactly measured by the lowest 
quality under occupancy, for no land will be 
occupied, naturally, while a higher reward, for 
the same quality of labor, awaits it elsewhere. 
When all land is occupied, it must be deter- 
mined solely by the comparative operation 
which gravitates it toward the level of un- 
occupied land. 

Under, moreover, the increase of population 
and the conditions of land occupancy, the prin- 
ciple which we have before us wholly loses its 
influence, on the minimum side, even before 
the monopolization of the soil, on a part of the 
labor applied as heretofore noted which has 
the peculiar characteristic that it is neither 
connected with land direct, nor even with its 
materials, so far as its valuation is concerned. 
That is to say, in order that labor may apply 
itself without direct connection with the earth, 
it must have materials upon which to work 
and subsist itself ; that, indeed, labor may begin 
to apply itself on most soils, it must have 
materials in the shape of food, tools and seeds, 
with which to overcome the difficulties ob- 



38 DISTRIBUTION OF LIVELIHOOD 

structing occupancy. But so soon as those 
favorable locations are occupied where labor 
may apply itself, as it must have done in the 
first instance, without special provision of tools 
and subsistence, whatever increase of popula- 
tion thereafter comes is obliged to apply its 
labor upon the land and materials of the citi- 
zenship in advance of it. Thus there arises a 
class of labor which receives its valuation 
altogether without regard either to land or its 
product, but solely under its constitutional 
competitive operation, and though it cannot 
by any possibility rise above the value con- 
ferred by either, its competition may carry it 
very much below such value. 

And that it does so, is abundantly manifested 
by the existence of interest, for this must rep- 
resent the difference between the value under 
consideration and that conferred by land 
materials, comparatively considered. This 
modifying phrase I use advisedly, for there 
obviously exists between the representative 
sorts of labor at least one distinction, namely, 
that in connection with the last there is the 
quality of responsible direction, whereas in the 
first this quality is absent. Thus labor in con- 



DISTRIBUTION OF LIVELIHOOD 39 

nection with materials must be properly and 
successfully applied in order to result in value, 
and is punished with lack of value and even 
loss if not so applied; but labor receiving its 
value without regard to the outcome of its 
application is unaffected, so far as that value is 
concerned, with the result of such application 
whether it be successful or unsuccessful. 

In order to pay interest, the borrower of 
materials must always realize in the applica- 
tion of his labor thereon, an excess value over 
the value of his labor off the same, plus com- 
pensation for any additional qualities or exer- 
tion required in the one case over the other. 
In order likewise to pay rent, the sub-occupant 
of land must realize an excess value for his 
labor thereon over his labor off it, so that this 
difference must represent the difference be- 
tween the value conferred by land and the 
value conferred by materials alone. 

Thus there arise, under the circumstances 
of labor application, three gradations of value: 
first, upon land; second, off land and on land 
materials; and third, off both land and its 
materials. These may be designated Land, 
Landless, and Simple Value respectively. And 



40 DISTRIBUTION OF LIVELIHOOD 

as, under an increasing population, there is 
always a pressure of labor seeking application, 
the difference between these values tends to 
be offered as a premium to ensure application 
for it, there arise Rent and Interest, the first 
representing the difference between Land and 
Landless value, comparatively considered, and 
the second the difference between Landless 
and Simple value, comparatively considered. 

There is thus brought about, underneath the 
actual value of labor, as it is variously applied, 
a distributive value common to its several 
modes of application. This distributive value 
is identical with the Simple value of labor, ad- 
vances in the case of Landless value to where 
interest begins so as to compensate for the 
extra qualities involved in this species of ap- 
plication, which point also fixes its proportion 
of Land value, it being in this case overtopped 
by both interest and rent. Or, analyzed down- 
wards, labor begins with an actual value upon 
land that, as its application proceeds to lower 
qualities of soil and then to intensified com- 
petition of land materials, is absorbed into rent 
to the extent of the latter. In addition, as both 
the soil available for untrammeled labor appli- 



DISTRIBUTION OF LIVELIHOOD 41 

cation, that is, without the necessity of tools 
or other provision, and the materials for appli- 
cation off land, are monopolized, it is further 
absorbed, through the medium of such mater- 
ials, to the extent of interest. What then re- 
mains represents its distributive value, accord- 
ing to the comparative qualities involved, as 
it is universally applied. 

Accordingly we find that labor has an actual 
value beginning with the highest quality of soil 
under production and above which it of course 
cannot rise, comparatively considered, and 
from which point it grades downward accord- 
ing to the fertility of the soil, after which it 
proceeds according to the competition of labor 
apart from responsible connection with either 
land or its products. This latter condition 
represents its value in distribution, for here 
the worker receives the value thus secured 
without deduction, whereas in the preceding 
cases deduction is made for interest, and, in the 
case of land, for both rent and interest. 

But though the actual value of labor thus 
grades downward, its distributive value re- 
mains, as I have already observed, common to 
its several conditions of application, that is to 



42 DISTRIBUTION OF LIVELIHOOD 

say, it remains at an equilibrium, compara- 
tively considered. For between the value of 
the labor of the unskilled worker and that of 
the highest commercial genius there is ob- 
viously, and, indeed, it is indubitably evidenced 
by the existence of interest, which clips away a 
portion of the actual value of the latter, an 
equalizing process that, subsidiary to their 
constitutional adjustment under the operation 
of supply and demand, places them upon the 
same comparative level. And this same dis- 
tributive value also pertains to land applica- 
tion, as is evidenced by the existence here of 
rent as well as interest. 

Thus we find that labor nas an actual value 
and a distributive value, and that they diverge 
to the extent of interest and rent. If, accord- 
ingly, we seek to meet the corrective demand 
of the time that labor shall have equal rights 
and be given its full product, we must bring 
this distributive value of labor to its actual 
value, and the evidence of which will be the 
disappearance of interest and rent. To accom- 
plish this in a natural manner, we will ob- 
viously have to raise the base from which this 
distributive value operates, and which we have 



DISTRIBUTION OF LIVELIHOOD 43 

found to be the third gradation of actual value, 
or, as I have designated it, Simple value. 

Now this Simple value is found under the 
competition of labor apart both from land or 
land materials, so far as the value conferred 
by them is concerned. It is found, in other 
words, in the relation between the supply and 
demand of this labor; and this supply is con- 
stituted, obviously, of such of the society's 
labor as offers itself for hire, upon the basis of 
the labor solely, while the demand rests in the 
requirement of the productive organism for 
this sort of labor. Reducing these to their 
competitive basis, the first consists of so many 
days' labor, and the demand to so many. Let 
us suppose that in the first case it amounts to 
one million, and in the second to one-half 
million. Dividing the first into the second, 
we get a Simple value of One-half. 

If we now attempt to alter the relation be- 
tween the two, we are confronted by the fact 
that population, which supplies the first, is 
something that cannot readily be reduced, and 
that production, which furnishes the second, 
is something that cannot readily be increased, 
for it may very reasonably be supposed to be 



44 DISTRIBUTION OF LIVELIHOOD 

always at the greatest expansion permitted by 
the circumstances surrounding it. But though 
these cannot be altered in their volume, the 
demand furnished by the second can be readily 
increased by the simple expedient of reducing 
the competitive basis of the first, which is to 
be accomplished by restricting the length of 
its daily application. Thus if the figures 
above compared are assumed to be estimated 
on the basis of a ten-hour day, if the latter is 
restricted to five hours the figures will be the 
same in the first case, that is, one million, but 
will be double, namely, one million also, in the 
second case. For if a certain population under 
a ten-hour day will furnish one million days 
of labor supply, under a five-hour day they can 
but furnish the same number, if restricted to 
the five-hour basis; but if a certain volume of 
production requires half a million days of 
labor, of ten hours, it must require one million 
days of five hours. Under these circum- 
stances, accordingly, the rate of Simple value 
would be One, or double what is was pre- 
viously. 

As, under a restricted day, Simple value is 
made thus to advance, it must absorb interest ; 



DISTRIBUTION OF LIVELIHOOD 45 

when the latter is absorbed, the advance will 
impel Landless value upwards to the lowest 
quality of land under production, if it is below 
the latter, but cannot by any possibility ad- 
vance it above such land value, for the labor 
in application on this land would in that case 
flow off it to seek the higher return, the effect 
of which would be to instantly quench the 
source of all value by the curtailment of the 
product of the soil. The Simple value of 
labor, accordingly, cannot by any possibility 
be advanced so as to absorb rent as it exists 
above the lowest quality of soil under produc- 
tion, nor, as a consequence, can the distributive 
and actual values of labor be brought to the 
same level, but the latter must always overtop 
the former by the extent of rent as just modi- 
fied. Indeed, this is plainly apparent on the 
surface of things, for since the value of labor 
arises from land, the different qualities of the 
soil must return correspondingly different 
values. And since there is no means by which 
the soil can be equalized, if the labor applied 
to it is to be placed on terms of equality, it 
must be affected through taxation. Rent, in 
short, should be absorbed in taxation, and dis- 



46 DISTRIBUTION OF LIVELIHOOD 

tributed, if there is a surplus beyond the re- 
quirements of government, to the citizenship 
pro rata. 

In practical application, the workday of labor 
should be gradually restricted, and land at the 
same time taxed until no rent is offered for it.. 
The workday of production should not, how- 
ever, be interfered with, so as to give the 
fullest capacity to the tools engaged therein. 
The labor day should be reduced until its 
further restriction produces no advance in 
wages. At this point there is an equation 
between the competitive relation of hired labor 
and its actual value or product. If wages are 
then not above the scale of comfortable liveli- 
hood, population is at the full expansion per- 
mitted by the conditions of subsistence pro- 
curation in that certain state of production, 
and its increase must be prevented to avoid 
a general condition of poverty and distress. 



CHAPTER IV. 

In the preceding chapter two corrective 
principles are elicited that seem necessary for 
an equitable distribution of the annual produc- 
tion of livelihood, namely, that rent should be 
absorbed in taxation, and that the hours of 
hired labor of all descriptions should be re- 
stricted until no further advantage results. * 

The practicability of the first I need scarcely 
dwell upon. Land is so generally suboccu- 
pied that the condition of the actual occupants 
would not be affected in the slightest degree, 
except where the occupant is the owner. Here 



* The exclusion of children from pecuniary 
employments would also be a very desirable eco- 
nomic reform, although it does not concern the 
question of distributive equitability to any great 
extent. In a similar connection, however, it may 
be observed that the engagement of women in com- 
petitive occupations does, as regarded against their 
seclusion from these occupations in the institution 
of marriage, produce an inequitable condition for 
the males that marry as against those that do not. 
in that the former undertake to support a female 
47 



48 DISTRIBUTION OF LIVELIHOOD 

there would be a reduction of revenue. This 
correction should, of course, be applied grad- 
ually so as to provide for the conditions of land 
tenure. 

But with respect to the restriction of the 
hours of hired labor there will probably be 
considerable objection and uncertainty. It 
will probably be claimed that if wages are 
raised the incentive to save will be weakened, 
and that production, which it is said depends 
upon the amount of revenue reserved for 
capital, will thereby be lessened. 

The principles of production, as currently 
annunciated, have been elicited by examining 
the productive organism from the viewpoint of 
an accumulated stock, which then applies itself 
reproductively for the sake of a revenue, or is 



upon the same scale of distribution that the latter 
support themselves alone upon and which would be 
higher if every male undertook the same under- 
taking. A tax upon unmarried males would tend to 
equalize matters, although I do not know how an 
accurate estimation of the proper rate of tax could be 
arrived at, in view of the considerations involved. 
Another urgent economic provision is the care of 
widowed mothers with children requiring parental 
maintenance. 



DISTRIBUTION OF LIVELIHOOD 49 

consumed unproductively. The natural de- 
ductions are that the more that is saved from 
unproductive consumption the greater will be 
the volume of productive consumption, and 
that the greater the revenue to be derived the 
greater will be the incentive to save for this 
purpose. 

But when, instead of examining the produc- 
tive organism from the basis of an accumulated 
stock, and which is distinctly a reverse process, 
we examine it along its natural course of up- 
growth, we shall find that the principle of 
saving has but a limited scope of operation, 
is impelled and guarded to that extent by 
necessity, and cannot by any possibility exceed 
it; and that revenue is wholly submerged in 
that basic principle which underlies produc- 
tion, namely, that it begins under necessity and 
ceases only when this necessity is removed, 
that is, when one's wants are satisfied. 

As the produce of the soil issues therefrom, 
a certain part must always be reserved and 
abstracted from it for the purpose of repro- 
duction and for repairing and replenishing the 
tools with which it is brought forth. As, 
moreover, the most part of this produce must 



50 DISTRIBUTION OF LIVELIHOOD 

undergo refinement before it can be used for 
human subsistence, and must also, under a 
system of divisional production, be inter- 
changed throughout the society, a certain part 
must likewise be used for the tools and instru- 
ments of refinement and exchange. Whatever 
remains of the annual produce of the soil, 
except such small portion as, before all land is 
occupied, is reserved to begin its occupancy, 
forms the fund of annual subsistence. 

Now the first reservation noted is absolutely 
imperative to human existence, and self-preser- 
vation compels those immediately interested, 
that is, those engaged in soil production, to 
always provide for it. 

The second reservation, while not impera- 
tive to human life, is nevertheless compelled 
by an insurmountable condition, namely, that 
the materials cannot be consumed except as 
they pass through such reservation in its dif- 
ferent forms of tools and instruments of ex- 
change in the necessary process of refinement 
to render them consumable. 

The third reservation is always made by 
those directly interested. The land producer 
who wishes to extend his production over an 



DISTRIBUTION OF LIVELIHOOD 51 

unoccupied area, will make the necessary pro- 
vision, as likewise will those citizens who con- 
template the occupancy of new sections. This 
provision is enabled by retrenching consump- 
tion in one direction so as to command the 
commodities needed in another, and whose 
production has been instigated by the changed 
tenor of demand. In this instance alone, by 
loaning their accumulations, the saving of the 
community in general can influence the prin- 
ciple of reservation. But, except on extra- 
ordinary occasions, the occupancy of un- 
occupied land proceeds so gradually that the 
saving which everyone is compelled to make 
for his old age may very properly be deemed 
to amply suffice for assistance to the saving 
directly made for such occupancy. 

Thus, the reservation or saving necessary for 
the requirements of the productive organism 
is always made by those directly interested, 
and no further actual saving is possible. For 
though money may be saved, this reflects itself 
in no actual reservation. Those directly in- 
terested will most assuredly reserve no more 
materials for reproductive purposes and tools 
than they have occasion for, and no one else 



52 DISTRIBUTION OF LIVELIHOOD 

can do so. All the money thus saved can 
possibly do is to compete in the industrial 
organism for employment. This it does by 
gathering together a stock of materials and 
engaging in their refinement or exchange. 
But had it been spent instead of saved, it would 
have created a consumptive demand that could 
only have been satisfied by the utilization of 
these materials in production. The accumu- 
lation of money, in brief, simply changes the 
demand for worked-up subsistence to un- 
worked-up subsistence, that is, to the materials 
of the soil as they issue from it in their raw 
state. In this way it intensifies the competi- 
tion of these materials, but it obviously cannot 
add to their volume, nor does it add to the 
volume of production, for had the demand for 
these 'materials been furnished through the 
medium of worked-up commodities rather than 
direct, their refinement would have inevitably 
proceeded to satisfy such demand. It does, 
indeed, enable materials to be gathered 
together and thus permit production to take 
place in larger units than would probably 
otherwise be possible, but that it increases 
production except as this condition may aug- 



DISTRIBUTION OF LIVELIHOOD 53 

ment the efficiency of labor there seems to be 
no ground for supposing. 

Money, in its operation, exhibits some very 
interesting phenomena. By means of it pro- 
vision can be made for the exigencies of life 
and for the necessities of old age, when labor 
is no longer possible. One generation wish 
money for future expenditure, and are willing 
to exchange subsistence for it; the succeeding 
generation likewise desire money for their 
future needs, which enables the first to dispose 
of their accumulation for the subsistence that 
they now require and which the second genera- 
tion stand ready to furnish; and so on. Its 
accumulation is synonomous, in result, to a 
like accumulation of subsistence, although its 
hoarding does not, of course, actually repre- 
sent the latter. Its hoarding, on the contrary, 
operates rather to retrench the aggregate vol- 
ume of subsistence. Thus if, for instance, 
money should be accumulated at the expense 
of the total consumption of soap, the soap 
industry must perish; and so with all other 
forms of production. But that money may 
satisfy any want beyond that embraced in its 



54 DISTRIBUTION OF LIVELIHOOD 

mere acquisition it must be outlaid, which tends 
to prevent undue parsimony, except where the 
object is to secure a revenue, and this in its 
turn must likewise be laid out to satisfy any 
material want. However, whatever conduces 
to lessen the necessity for such provision 
doubtless operates to bring many a tree from 
the forest that would otherwise waste away in 
decay and turn it into some form of subsist- 
ence, and to bring under production many an 
acre that otherwise would lie barren. For, the 
land producer cannot produce a surplus unless 
the landless producer absorbs it, nor the latter 
unless the former does likewise. It would be 
absurd for anyone to produce more than he 
can consume himself and exchange for the 
produce of his fellows. Production, in short, 
cannot exceed consumption. 

In the transaction of government borrow- 
ings is to be found another remarkable opera- 
tion of money. These loans exceed, probably, 
all the money in existence, or, at any rate, they 
might readily do so. The money for these 
loans is borrowed from the citizenship, and 
then, taking the world as a unit, immediately 



DISTRIBUTION OF LIVELIHOOD 55 

expended amongst them, upon which it is pres- 
ently loaned over again. 

Government borrowings have in view an 
object exactly opposite to that for which ordi- 
nary loans are contracted. The latter have 
production for their object, and in the produce 
their repayment is insured. But the former 
are destined for consumption and when this 
is completed nothing remains with which to 
make repayment. The money has been ex- 
pended for consumptive commodities, and 
these have been unproductively consumed. 
Taxation is the only resource, and this has 
rarely sufficed to more than pay interest. 

Because of this different destination money 
loaned to government is enabled to fix itself as 
a tax upon industry not only once, as in the 
case of industrial loans, but twice, thrice, and 
repeatedly. In order to pay the revenue for 
which an industrial loan is made, it must be 
productively employed, and this it of course 
cannot be doing more than once at the same 
time. But, when loaned to the state its 
revenue is secured through taxation, and the 
latter, spread over a vast industrial organism, 
can be readily multiplied as often as the loan 



56 DISTRIBUTION OF LIVELIHOOD 

passes from the citizenship to the state. In 
order for these loans to return to the lenders 
without repayment a stock of commodities 
must, of course, be furnished to the state in 
exchange for the funds which the former have 
loaned. But these commodities are then un- 
productively consumed and pass out of exist- 
ence ; whereas, in the industrial organism, they 
must be continued in existence through repro- 
duction in order to afford a revenue. 

Considered purely as a business proposition, 
the loan of government borrowings would not 
appear as a particularly favorable operation to 
the citizenship. They hand over their money, 
and then hand over sufficient goods to get it 
back. They have indeed secured an invest- 
ment, but they themselves foot its return. 

But though this is the case when the citizen- 
ship is regarded as a unit, it is quite different 
when viewed from the standpoint of the in- 
dividual citizen who furnishes the loan. He 
secures a channel of investment supplementary 
to the industrial field that yields a secure 
return to his funds at a rate proportioned upon 
the revenue from industrial investment. 

In regarding the different destination of gov- 



DISTRIBUTION OF LIVELIHOOD 57 

ernment and industrial investments a consid- 
eration arises of singular interest: whether it 
would not be desirable to condition the first 
according to the peculiar circumstance of its 
destination. In other words, since the legiti- 
mate base of repayment passes out of existence, 
why should not the loan be conditioned so as 
to do likewise. Let it be sought, for any cer- 
tain term, let us say twenty-five years, on a 
condition of no repayment. Under these cir- 
cumstances the rate of interest would advance 
to provide for its repayment in that form. 
Thus if a loan is sought and loaned under the 
ordinary method at let us say three per cent., 
if it is sought upon the condition that it shall 
automatically liquidate at the end of twenty- 
five years, it will be furnished at a rate in 
excess of three per cent, that will provide its 
refund through the medium of the excess, by 
the expiration of that period. The interest, 
or, more properly, premium, will advance to 
somewhere around six per cent. 

Several advantages seem to accrue under 
this method. In the first place each generation 
is enabled to discharge the obligations it 
incurs. Where, of course, it might seem 



58 DISTRIBUTION OF LIVELIHOOD 

equitable that these should spread over several 
generations, the period of the loan could be 
correspondingly lengthened. 

Secondly, those vast debts would not 
accumulate which now so onerously burden 
society, and which, besides, seem to result in 
a very distinct disadvantage to the borrowers. 
For, as it balances over the livelihood of a 
country, money is subject to continual altera- 
tion of value. If the fund of livelihood is 
small compared with the volume of money, 
the latter is less valuable than when the fund 
of subsistence is comparatively large, for it 
will purchase a correspondingly smaller quan- 
tity pf livelihood in the one case than in the 
other. Now under the expanding efficiency 
of labor the fund of subsistence tends ever to 
augment, and the result is, other things re- 
maining the same, that a certain sum of money 
tends to be less valuable at any certain time 
than it is at any subsequent time. Compared 
at the distance of a century or two, it is prob- 
able that the difference in value would be very 
considerable. Thus, for example, two cen- 
turies ago an organ might have cost a small 
fortune; now a very good one can be pur- 



DISTRIBUTION OF LIVELIHOOD 59 

chased for a hundred dollars. Even so late as 
twenty years ago their value was thrice what 
it is now. Accordingly, within the space of 
twenty years the value of money has, with 
respect to this particular commodity, trebled 
in value. Now if this tendency is general with 
regard to the major part of subsistence, in the 
repayment of long standing loans a much 
greater value is returned than was borrowed; 
and the same principle of course applies to the 
extended payment of interest. It seems ex- 
tremely desirable, therefore, that a loan which 
is consumed unproductively and therefore does 
not incorporate to itself the advantage which 
money seems to acquire with the passage of 
time, should be repaid with all possible ex- 
pedition. 

It is true, of course, that as the value of 
money augments, its production is probably 
stimulated, thereby expanding its volume. But, 
it is likewise to be borne in mind, the precious 
metals are something that cannot be produced 
in any desired quantity. However their value 
might be increasing, their production must be 
finally regulated by the capacity of the mines ; 
and while the product of these may be tempo- 



60 DISTRIBUTION OF LIVELIHOOD 

rarily increased, in the long run the output of 
the precious metals must be on a decreasing 
scale in consequence of the exhaustion of the 
sources of supply. 

It would seem, indeed, that eventually there 
must be devised an exchange medium other 
than the precious metals; and, in fact, did 
social conditions permit, the change could be 
made at any time with much advantage. Thus 
if, for instance, a paper currency were issued 
proportioned upon population, that is, so much 
to each citizen, and kept in this proportion 
by means of a report, at the end of every 
decade, let us say, from the citizen of his 
holdings, or by means of the census, all that 
considerable labor connected with metal 
money would be obviated and an advantage 
derived of considerable account. For not only 
could the money thus shown to have disap- 
peared in the interim be reissued by the 
state, thereby serving in lieu of tax funds, 
but providing the increase of population with a 
proportionate currency, or, perhaps I might 
more clearly express it, augmenting the vol- 
ume of currency so as to leave its pro rata 
proportion the same under an increased popu- 



DISTRIBUTION OF LIVELIHOOD 61 

lation, would facilitate the same purpose. 
Such a currency is, of course, possible only 
under a high order of social stability and 
integrity. 

Thirdly, it would tend to keep the rate of 
interest down. Thus just as, with no channel 
of government investment, the holders of 
funds would be obliged to enter the industrial 
organism and compete for the revenue they 
derive from the state, thereby intensifying 
productive competition and lowering its profits 
and therefore the rate of interest, so, in pos- 
session of this revenue, they are enabled to 
refrain, to that extent, from such industrial 
competition. If, to illustrate, instead of the 
present accumulation of let us say twenty 
billions of government indebtedness it had 
been kept down to say one billion, there would 
evidently have to be, in order that the govern- 
ment creditors might have a revenue from 
their funds, nineteen billions additional com- 
petition in the channel of industrial revenue, 
with, it would seem, a corresponding lower 
rate of revenue. 

Fourthly. If, as we may reasonably sup- 
pose, the present rate of interest is somewhat 



62 DISTRIBUTION OF LIVELIHOOD 

above the normal rate by reason of the reduc- 
tion of industrial competition just noted, it 
would appear that, as time progresses, with 
the influence of accruing } government accumu- 
lations removed, it would tend to be lower 
than it would otherwise be at any certain time 
by the extent of such removed influence. Ac- 
cordingly, all things remaining equal, this 
would enable the refundment of these accumu- 
lations now existing at a rate of interest that 
would enable their repayment without any 
additional burden on the citizenship than is 
now required to pay the interest alone. Thus 
if the interest on state indebtedness now 
averages three and one-half per cent., if it 
could be refunded at around two and three- 
quarters, under the influence just noted, the 
difference would, in the course of a century, 
liquidate the principal. And as this vast sum 
was gradually restored to the field of indus- 
trial revenue competition it would serve to 
remove the exact uplifting influence which its 
original withdrawal from the industrial arena 
had exerted. Every dollar repaid, in other 
words, would facilitate the repayment of the 
next without added burden to the taxpayer. 



DISTRIBUTION OF LIVELIHOOD 63 

And, fifthly, it would afford a channel of 
investment where those who, like the aged, 
must entrench upon the savings from the 
revenue of which they are only partially able 
to maintain themselves, could do so with the 
greatest security and advantage. Some such 
secure repository for money is, indeed, under 
any circumstances, a social need that should 
very properly be afforded by the state. 

We have now to consider that other con- 
dition brought into view by the analysis of the 
foregoing chapters, namely, the regulation of 
population to the circumstances of the pro- 
ductive organism, for, after the reasonably 
ha»bitable land of a society is occupied this 
becomes, under certain conditions, as I have 
shown, an imperative necessity if poverty and 
distress are to be avoided. 

This, indeed, is the real difficulty to be en- 
countered. That rent can be gradually ab- 
sorbed is an obvious proposition. And that 
a restricted workday for hired labor is not 
only practicable, but would probably be self- 
sustaining, is amply evidenced by the conduct 
of labor unions. 



64 DISTRIBUTION OF LIVELIHOOD 

But when we seek to hold population within 
prescribed limits we find ourselves confronted 
by conditions of nature that operate with 
irresistible force. Nature compels the inter- 
mingling of the sexes, and the normal result 
is inevitably an increasing population. 

There are two possible ways by which pop- 
ulation may be held at any certain limit, or at 
any rate of increase : first, by holding the num- 
ber of births at that point, and second, by 
reducing the number of infants as they are 
born to that point. Very general individual 
attempts are made in all civilized nations to 
effect the first condition, but no attempt has 
ever been made by the state, for it is neces- 
sarily a state affair, to effect the second. 
That, however, under certain conditions, in- 
dividual efforts in the first respect failing, it 
becomes the duty of the state seems very clear. 

For, if we inquire what is the object of 
human existence we shall be obliged to con- 
clude that it is the acquirement of happiness, 
as no other object can possibly be conceived; 
and if we inquire what constitutes happiness, 
we shall see with like distinctness that it is 
the satisfaction of one's wants. 



DISTRIBUTION OF LIVELIHOOD 65 

Human wants consist of two classes, 
material and mental. 

It would be a difficult thing to estimate the 
bounds to which the material wants of man 
might mount, but it is very easy to see that 
they cannot go below a certain point and con- 
fer happiness. Man must have habitation and 
clothing to protect him from the elements. 
He must have sufficient food to comfortably 
sustain him ; and he must have the opportunity 
of mating with the opposite sex. It is im- 
possible, I judge, to conceive of complete hap- 
piness for a normal man or woman if their 
wants in these several respects are not ade- 
quately satisfied. 

It would be a still more difficult thing to 
estimate man's mental wants, or the direction 
they might take. But it is exceedingly easy 
to see that they must all radk.te from a basic 
necessity, namely, absolute freedom of action. 
From this foundation man may immerse him- 
self in aestheticism, or in sensuality, with 
equal facility. 

A society, accordingly, that is in accord with 
the object of life, must secure to its members 
the ability to procure those material wants 



66 DISTRIBUTION OF LIVELIHOOD 

that are necessary to their happiness, and con- 
fer upon them all freedom of action that is 
consistent with the rights of their fellows. 

Now, after population passes a certain point, 
the first condition becomes an impossibility. 
For, as the produce of the soil is increasingly 
subdivided its capacity to afford a comfort- 
able pro rata livelihood must finally be 
reached, after which an increase of population 
must result in a pro rata livelihood that be- 
comes increasingly insufficient. 

I shall endeavor in the next chapter, as I 
place in their sequential order the various 
principles heretofore annunciated, to show the 
manner in which this insufficient condition of 
livelihood manifests itself, 



CHAPTER V. 

i endeavored to establish, in the third chap- 
ter, that labor has three values: the first de- 
rived from direct contact with the soil, the 
second from contact with the materials of the 
soil manipulated apart from the latter, and the 
third without contact with either of these 
agents so far as ownership is concerned, 
although of course necessarily in contact with 
them so far as application is concerned. Then, 
because the abstraction of rent equalizes the 
first two and the abstraction of interest the 
second and third, I pointed out that the latter 
represents the distributive value of all three, 
that is, it is what the workers receive for their 
labor as distinguished from what they actually 
produce. I then suggested that by restricting 
the daily application of this third species of 
labor its competitive ratio and therefore its 
value could be advanced, and thus the dis- 
tributive value of all three species, but pointed 
out that this value could not pass above the 
return from the lowest quality of land under 
67 



68 DISTRIBUTION OF LIVELIHOOD 

production, for this would cause a flow of 
labor off the soil and by thus contracting the 
volume of the productive organism, would 
reduce the demand factor upon which the com- 
petitive ratio was being advanced and thereby 
bring its advance to a stop. Under these cir- 
cumstances taxation was necessary to reduce 
the first or land value to its distributive plane. 
In the second chapter I noted among other 
things the natural tendency of population to 
adjust itself according to the circumstances of 
the productive organism. That is to say, it 
will naturally occupy itself upon any certain 
area of soil and in the refinement of the pro- 
ducts thereof until the occupation capacity of 
these are exhausted, when it will overflow 
onto new soil. I also pointed out that one 
element in the increasing efficiency of labor, 
that is, its capacity to occupy a greater pro 
rata area of soil and of its materials, hastens 
the necessity for such an overflow. For, other 
things remaining equal, that is to say, if the 
produce of the soil does not at the same time 
proportionately augment so as to afford more 
materials for the occupation of the population 
which is forced off such soil by the expanding 



DISTRIBUTION OF LIVELIHOOD 69 

units of its occupancy, this population repre- 
sents a surplus on the productive organism 
furnished by that certain area of soil and must 
overflow or engage in a struggle for occupa- 
tion where it is, with results that I shall here- 
after consider. 

For the productive organism is constituted 
after the following order: From the soil there 
is seasonally brought forth a volume of pro- 
duce in the shape of foods, woods, minerals, 
plants, and so on. A portion of this produce 
is immediately consumed and reserved for 
consumption during the interim until the next 
crop and for seeding by the immediate pro- 
ducers. The balance passes on to the remain- 
ing citizenship and constitutes their occupa- 
tion. Thus the productive organism furnishes 
occupation for the citizenship, some of them 
upon the soil direct, others as exchange mer- 
chants, more as manufacturers, and still others 
as professional assistants to all three. But 
when either by reason of its increase or the 
expanding occupancy capacity of its labor the 
citizenship begins to exceed the occupation 
afforded by any certain area of soil, it naturally 



70 DISTRIBUTION OF LIVELIHOOD 

tends to overflow upon adjoining and new 
areas. 

I further observed that this overflow is a 
natural and voluntary process provided it is 
unobstructed, and in the third chapter ex- 
plained that the necessary provision of seeds, 
tools and subsistence for the purpose would 
naturally be made by those directly interested. 
So, I think it will generally be admitted, will 
be the case so far as nothing obstructs the 
natural course of things. Unfortunately, how- 
ever, the virgin soil that can be readily occu- 
pied by an expanding population is limited in 
extent, and occupation is generally impeded 
by forests, lack of irrigation or drainage, 
mountain ranges, great bodies of water, hostile 
nations, and such like. And this, by prevent- 
ing the tendency of overflow, also impedes the 
operation of its concomitant necessity, namely, 
making the necessary provision for the over- 
flow. For, as the expansion onto new soil 
becomes increasingly difficult, population tends 
to unduly pile up or thicken on the old soil, 
with the result that the labor of those directly 
interested in occupying the new soil depre- 
ciates in value under the process outlined in 



DISTRIBUTION OF LIVELIHOOD 71 

the second chapter, and gives them less capa- 
city for saving up the necessary provision. As 
the difficulty of occupancy increases, that is, 
as more provision must be made for accom- 
plishing it, the capacity for making that pro- 
vision becomes smaller by those directly inter- 
ested. The consequence is that the expansion 
onto new soil becomes more and more the work 
of the favored classes of society, and who are 
motived not by direct necessity but rather by 
the desire for a revenue from their savings. 

The necessity for the occupancy of new soil 
is manifested by two conditions, first, lack of 
occupation, and second, a state of depreciated 
labor value. Thus, as the landless possessor 
of a stock of materials either finds a lack of 
occupation for them, or, comparing what he 
can make with them in the field of landless 
production with what is made from them on 
the soil direct, finds an advantage in soil pro- 
duction, he naturally turns to the unoccupied 
soil. And so likewise the landless worker with 
no materials as he finds his occupation begin- 
ning to dwindle, or finds upon comparing its 
value with the earnings of those who hire his 
services that it is to his advantage to move 



72 DISTRIBUTION OF LIVELIHOOD 

onto new soil, he will naturally begin to make 
provision to do so. Of course, as the society 
becomes larger and more complex, these prin- 
ciples probably do not meet with so ready 
response, nor perhaps is their scope so com- 
prehensive. 

But though these principles may be ob- 
structed in their operation by one cause or 
another, provided there is new soil that per- 
mits of ready occupancy, we may assume that 
it will always be occupied before a condition 
of inequitable livelihood can very greatly pre- 
vail, barring, of course, rent — for this exists at 
all times in the varying fertility of the soil, 
although it may be wholly unmaterialized.* 



* In the case of the rapid occupation of new 
sections, interest, and even a high rate of interest, 
might exist in the face of a plentitude of un- 
occupied land, occasioned by the pressure of labor 
because of the inability to occupy such land, ac- 
cording to the prevailing state of production, with 
sufficient rapidity owing to the lack of the materials 
of occupation customary in such a state. There 
might be more advantage in the application of one's 
labor in the third species of application than in 
occupying the new land with inadequate instruments 
of occupation. 



DISTRIBUTION OF LIVELIHOOD 73 

For, with the entire citizenship occupied, the 
condition which creates interest, namely, 
pressure for occupation, is not present, and 
with land ready at hand for occupancy in case 
of dissatisfaction with the return from their 



In connection with the occupancy of new soil 
I heretofore remarked that all that was necessary 
to enable the overflow of population thereupon was 
a few seeds and necessary subsistence. Although, 
compared with the beginnings of land occupation, 
this is literally true, the principle should be applied 
relatively upon the basis of the prevailing condition 
of production. For if, in a progressive state of 
production, greater requirements are necessary to 
occupy new soil, either because of natural difficulties 
or to conform through the return to the return of 
labor application exerted on the existing occupied 
soil and in its landless occupations, those require- 
ments can be much more readily procured in such 
a state of production. For all substantial purposes, 
therefore, I think it may be held that except where 
extraordinary obstacles to occupancy exist, new soil 
will be occupied by an overflowing population if it 
is wholly free to occupancy, although, as I also 
observed, where the excess population congregates 
into the centers of population the natural tendency 
of such overflow occupancy is disturbed by the dis- 
association with soil production that this order of 
life brings about. 



74 DISTRIBUTION OF LIVELIHOOD 

labor, we must assume that the citizenship are 
occupying themselves under a condition of 
equitable labor value, and therefore are living 
under a condition of equitable livelihood, bar- 
ring the element of rent. Whether, of course, 
this livelihood, though altogether equitable, is 
opulent or the reverse wholly depends upon 
the proportion between the volume of subsist- 
ence and the number of citizens. If the 
volume of subsistence is large compared to the 
citizenship there will be, by reason of the ca- 
pacity of the latter to produce such large vol- 
ume, a large pro rata livelihood, and opulence 
will prevail. Conversely, if the labor efficiency 
of the citizenship is at a low level, that is, if 
the volume of subsistence is small and the 
citizenship large, or the subsistence large and 
the citizenship likewise, although fully occu- 
pied in either case, the pro rata livelihood will 
be proportionately meagre or less so respect- 
ively. 

Now if, as I think there can be no doubt, 
with reasonably habitable land available for 
occupancy population will overflow thereupon 
and prevent a condition of inequitable liveli- 
hood, barring rent, we may very positively 



DISTRIBUTION OF LIVELIHOOD 75 

assume that the presence of such an inequit- 
able livelihood decisively indicates there is no 
land available for reasonable occupancy. We 
may assume, in other words, that the time has 
passed when population will naturally regulate 
itself to the conditions of its economic environ- 
ment, and that artificial regulation must be 
resorted to. In most European nations it is 
of course obvious that the land is fully occu- 
pied, but where, as in America at the present 
time, there are large tracts thinly peopled, it 
is evident, from the presence of interest in the 
productive organism, and of, I might add, a 
considerable degree of distressing non-occupa- 
tion as well, that obstructions impede their 
occupancy. Under such circumstances there 
are two courses to pursue. The first is to 
remove the obstructions and permit the con- 
ditions of inequitable livelihood force their 
occupancy if this is desired, as I suppose will 
always be the case. The other is to regulate 
livelihood to a state of equitability and prompt 
their occupancy by tempting conditions. Thus 
if the state were to render these sections rea- 
sonably habitable and exempt them from tax- 
ation for a suitable period it would be likely 



76 DISTRIBUTION OF LIVELIHOOD 

to induce occupancy. Probably a course 
medium between the two I have mentioned 
would be the most desirable. 

But though, in this particular case, the 
presence of interest indicates that there is, to 
this extent at least, impediment to the occu- 
pancy of new soil, it is not to be supposed, 
conversely, that the absence of interest would 
indicate that there is land available for occu- 
pancy. Interest arises, as I have heretofore 
pointed out, in the difference between the 
Landless and Simple values of labor. Now 
when all reasonably available land is occupied, 
the materials through which Landless value is 
secured are confined in their scope of occupa- 
tion and their competition tends to intensify. 
Great stocks accumulate and compete for de- 
creasingly low returns. Thus this value tends 
to the comparative level of Simple value, and 
might readily reach it. For if it is borne in 
mind that interest has its base in the industrial 
organism and does not properly include the 
premium that may be paid for funds for pur- 
poses other than production, it is very con- 
ceivable that the return from the industrial 
field might not afford the payment of interest. 



DISTRIBUTION OF LIVELIHOOD 77 

Under such circumstances funds would rather 
be sought under joint-stock conditions, where 
the lender retains the responsibility incurred 
in their use. He thus secures a revenue, 
but it is not interest except so far as the latter 
is tangibly manifested. Interest is a premium 
returned for the use of a loan, fully secured. 
But in this case there is no security for the 
funds loaned or invested. The lenders or 
investors in such a joint-stock arrangement 
usually engage a management, who give their 
services without responsibility attached. 
Whatever the return is above the value of 
these services accordingly accrues to the 
investors for the productive hazard they are 
undergoing in placing their means in the 
industrial organism rather than keeping it 
safely at hand for secure consumption. If this 
return should prove to be above what was 
considered a fair compensation for the respon- 
sibility incurred, it would probably exhibit 
itself in the borrowing of additional funds upon 
interest. For, by thus assuming the responsi- 
bility incurred, and still paying a premium, it 
is clear that the return is above its commensu- 
rate level. 



78 DISTRIBUTION OF LIVELIHOOD 

Interest seems to have arisen somewhat 
after this manner: As under the progress of 
events there arose that species of labor applied 
altogether apart, so far as valuation is con- 
cerned, from the land or materials without 
which labor cannot under any circumstances 
be exerted, this must have taken on a value 
that could not in the nature of things exceed 
its produce, less a commensurate deduction for 
the directive labor and responsibility which the 
owner of the land and materials was expending 
and undergoing. But as to thus enlarge his 
outlay of directive labor and thereby augment 
his revenue must have been the object of the 
responsible worker in engaging the labor of 
the irresponsible worker, so, as either the value 
of the produce rose, or the value of the labor 
and responsibility fell, thereby creating an 
excess of the first over the last, he would 
naturally seek to borrow more materials by 
offering this excess as a premium for their use 
and further increase his earnings. This dif- 
ference in the value of production over the 
market value of the productive factors incor- 
porated in it, is interest, iff my judgment is 
correct. 



DISTRIBUTION OF LIVELIHOOD 79 

By observing the manner in which this 
premium must needs be estimated the compar- 
ative relation of Landless and Simple labor 
values considered in the second chapter can be 
very plainly seen. For, in order to determine 
whether a premium could be paid for an aug- 
mentation of productive materials, there would 
have to be a comparative process to estimate 
the relative value of the different productive 
factors required in production. If, for ex- 
ample, we suppose a citizen producing by 
means of his sole labor upon his own materials, 
the productive return will be the value of the 
factors, namely, labor and responsibility, he 
contributes. If he now accumulates more 
materials and employs a subordinate species 
of labor while himself exerting the extra direc- 
tive labor required, and of course undergoing 
the added responsibility incurred, he will con- 
sider whatever remains of the productive 
return over the value of the subordinate labor 
involved as the value of his added directive 
labor and responsibility. But if, in this pro- 
ductive return, he finds scope for the payment 
of a premium for the use of borrowed mater- 
ials, it is clear that he considers the value con- 



80 DISTRIBUTION OF LIVELIHOOD 

ferred upon his directive labor and responsi- 
bility greater than he deems requisite for their 
compensation. Now in order to arrive at this 
conclusion he would have to compare these 
factors with something, and this, obviously, 
would be the subordinate labor ranged by their 
side. Accordingly, labor applied in irrespons- 
ible capacity becomes ranged on the same com- 
parative level as labor applied in responsible 
capacity, and the difference between this level 
and the full return from the necessary com- 
bination of the two materializes, through the 
borrowing of materials, into interest. Natur- 
ally, different degrees of productive capacity 
peamit correspondingly different degrees of 
premium to be offered for such materials, but 
these, arising from all quarters of industry, 
gradually form an average premium or rate of 
interest, which then permits the varying qual- 
ities of productive capacity to be congruously 
rewarded according to their respective cap- 
acity. 

Believers in the present principles of eco- 
nomic reasoning may find in the immediately 
preceding paragraphs an excuse for supposing 
that, if the return from production becomes 



DISTRIBUTION OF LIVELIHOOD 81 

reduced so as to be unable to afford interest, 
the materials of production cannot be bor- 
rowed, and it will, as a consequence, tend to 
languish to that extent, for the owners of 
materials will, for the most part, rather incline 
to consume them unproductively than engage 
in production with them personally if they 
cannot loan them for a revenue. I will en- 
deavor to consider this view. 

Productive materials consist of two classes, 
namely, raw products and subsistence. Now 
it is absolutely impossible to consume the first 
class unproductively, until they have been 
worked up into consumable shape through the 
medium of production. Unproductive con- 
sumption must, accordingly, always be wholly 
in the second class of materials, that is, it must 
consist altogether of subsistence. But, in 
order for the latter to come into existence it 
must first wholly come out of the soil in some 
shape, and then, so far as it is not in con- 
sumable shape as it issues from the earth, must 
pass through the productive process of refine- 
ment. Now the necessity of self-preservation 
compels those who cultivate the soil to retain 
sufficient subsistence to maintain them until 



82 DISTRIBUTION OF LIVELIHOOD 

the succeeding crop comes from the ground, 
and the same motive also compels those en- 
gaged in refining raw products in consumable 
shape to retain sufficient of the refined com- 
modity to subsist them while a new supply is 
being refined. This retention, indeed, takes 
place through an equational process. There 
is, in other words, in the productive organism 
so much land, so much raw products, and so 
much subsistence. Now the necessity of self- 
preservation, both actually and according to 
the prevailing standard of livelihood, compels 
the adjustment of a certain amount of this 
subsistence to the requirements of reproduc- 
tion. This adjustment will be gauged by the 
efficiency of production and the standard of 
livelihood prevailing amongst the producers, 
and will be effected through the price of sub- 
sistence. Regulated by its necessitous demand 
for productive purposes the price of subsist- 
ence will always be at a level that will prevent 
more being consumed unproductively than the 
requirements of reproduction permit. And, in 
the light of this necessary equational adjust- 
ment, we are able to see that whatever portion 
of subsistence exceeds this equation must, of 



DISTRIBUTION OF LIVELIHOOD 83 

necessity, be consumed unproductively. For, 
when the soil and its raw product are assigned 
their complement of subsistence according to 
the standard of livelihood prevailing amongst 
the producers, there remains no productive 
agent against which the surplus subsistence 
can be complemented, and it must be con- 
sumed unproductively. If the equational 
gauge, that is, the livelihood standard of the 
producers, is low, more will remain for unpro- 
ductive consumption; if it is high, less will 
remain ; if it is on an exact par with the volume 
of production, nothing whatever will remain. 
But though, under this last condition, nothing 
remains for unproductive consumption, the 
producers will be enabled to consume more 
opulently while engaged in production, and 
to store up consumption for leisure days. 
Thus they defer productive consumption to 
suit their purposes. 

If these views are correct, we may assume 
that the productive organism automatically 
regulates the mode of consumption, and I shall 
not further consider this aspect of the subject. 
The fact is, this organism, under that free con- 
dition of land occupancy upon which this ex- 



84 DISTRIBUTION OF LIVELIHOOD 

amination is premised, is regulated by those 
underlying principles which I have attempted 
to annunciate, and it is exceedingly difficult to 
examine it with any satisfaction or definiteness 
except along the course of their operation. 
Investigating from the surface, we presently 
come into contact with the sway of these fun- 
damental regulators, and, furthermore, its sur- 
face workings are frequently so interactionary 
as to make definite conclusions altogether im- 
possible. When, for instance, interest de- 
creases or disappears, there is left a certain 
proportion of population without their cus- 
tomary means of subsistence who must enter 
the field of labor application, intensifying the 
competition there, and producing results which 
it is impossible to estimate without exact 
knowledge of all the circumstances, but one 
of which might even be an advance of interest. 
In like manner the absorption of rent would 
throw those subsisting upon this source of 
revenue into the labor field, with results im- 
possible to judge without all the facts. 

But though no definite conclusions can be 
drawn from the surface workings of the pro- 
ductive organism, it is in direct line with the 



DISTRIBUTION OF LIVELIHOOD 85 

point of this chapter to consider the manner 
in which the absorption of rent and the disap- 
pearance of interest will affect the order of 
livelihood. For, before diverging, I had led 
up to the adjustment of population to the cir- 
cumstances of production. I endeavored to 
show, firstly, that the presence of interest indi- 
cates that population is in excess of the occu- 
pancy capacity of the reasonably habitable 
soil, and then showed that interest might dis- 
appear with this condition existing. Which 
is equivalent to saying that the presence of 
interest indicates an inequitable condition of 
livelihood, but that its absence, although it 
indeed shows this inequitable condition re- 
moved, so far as interest is concerned, does 
not give any indication whether that livelihood 
is meagre, sufficient, or opulent; or, stated 
differently, the conditions of livelihood may be 
equitable, and yet be very distressing for the 
less favored classes of the citizenship, by which 
last I mean those whose labor, in that inherent 
adjustment which comparatively grades all the 
labor incorporated in the productive organism, 
finds a low scale of value. With interest 
removed, and by this of course meaning pro- 



86 DISTRIBUTION OF LIVELIHOOD 

ductive interest and not the premium which 
money loaned will always command, the status 
of livelihood, that is, whether it is satisfactory 
or unsatisfactory, must, in fact, be wholly 
judged from direct observation, for rent, so far 
as it exists in the natural differences of soil, 
is a natural condition, and it might indeed 
exist upon the lowest quality of soil under 
cultivation without indicating that the state 
of livelihood was insufficient. For, within any 
certain boundary, or universally under a con- 
ceivable state of production, the return of one's 
labor might be more than sufficient for com- 
fortable livelihood, and the process of labor 
application considered in the second chapter 
would, under an increasing population, throw 
the excess into rent. 

Now if we suppose those corrective 
measures herein advocated to begin operation, 
as interest disappears and rent is absorbed 
there will be thrown into the labor field that 
population subsisting through these means of 
revenue. The consequence of this might be 
to neutralize the effect of the restricted work- 
day and leave wages, or Simple value as I 
have designated it, unchanged in its unitary 



DISTRIBUTION OF LIVELIHOOD 87 

aspect, but of course augmented in its aggre- 
gate volume; or its unitary value might even 
decrease at the same time that its aggregate 
value increased. A little reflection will evince 
that no definite conclusions can be drawn as 
to the resulting conditions of livelihood when 
it is brought to an equitable basis, and that 
we must proceed from the foundation upwards 
to get definite results. Thus, upon the as* 
sumption that population will always spread 
onto new soil when it is reasonably habitable, 
and that it is the duty of the state to make it 
thus habitable if an increased population is 
desired, we may conclude that the citizenship 
will always, to the largest extent possible, ad- 
just itself to the productive organism. It will, 
in other words, find occupation for itself so 
far as the field of occupation permits. But 
when, either by reason of the increase of pop- 
ulation or the expanding capacity of its labor 
occupancy, the field of occupation becomes 
insufficient to accommodate the citizenship, 
the manifest remedy is to reduce the units of 
labor occupancy, so that all may have a fair 
chance to procure their livelihood. This is 
only possible, as I have pointed out, within 



88 DISTRIBUTION OF LIVELIHOOD 

the bounds of hired labor, and as this repre- 
sents the third and lowest gradation of labor 
value, the effect, in addition to distributing the 
field of occupation, also exhibits the plane of 
livelihood which that certain state of liveli- 
hood production permits for the less favored 
classes of the citizenship, representing the 
lower grades of labor capacity. Accordingly, 
with livelihood on an equitable basis, if there 
exists a condition of unsatisfactory livelihood, 
as measured against the comparative standard 
prevailing, it is at once clear that population is 
excessive. 



CHAPTER VI. 

The sense of this essay, from its corrective 
aspect, is that interest should be eliminated 
from the economic organization of society, and, 
upon the assumption that the soil is the nat- 
ural heritage of the citizenship in general with- 
out consideration of prior occupancy, that rent 
should be absorbed and used for the general 
benefit. If when the first, or both of these 
have been effected, there exists conditions of 
distressful livelihood, then population should 
be restricted. 

For the reason that, altogether outside the 
return from productive operations, money will 
always command a premium for its use under 
loan quite indistinguishable from interest 
proper, there is but one means of determining 
when the productive organism is equitable in 
this respect, namely, by applying the correc- 
tion until no further advantage results. The 
competitive ratio of the third species of labor 
should be raised until no further augmentation 
in its value takes place. At this point it must 
89 



90 DISTRIBUTION OF LIVELIHOOD 

be on an equitable basis with those other 
species that engage its application, and until 
it reaches this point it manifestly is not so.* 

However rent may be regarded as it in- 
herently exists in the differing qualities of soil 
fertility, there certainly can be no justification 
for its materialized existence. However, in 
other words, a citizen might be entitled to 
benefit from his prior occupancy or judgment 



* For the benefit of those who might have hastily 
concluded that the absorption of interest would 
altogether deprive society of those benefits that flow 
from a revenue apart from labor concomitantly 
applied, it may be observed that such a revenue is 
possible where interest has no existence. Thus if, 
for instance, labor is incorporated in buildings and 
the latter are loaned or rented a revenue will be 
returned to reimburse such incorporated labor co- 
incident with the consumption of the building. This 
reimbursement will, however, not extend to cover 
interest if interest has not been incorporated in the 
process of construction, upon the same principle 
that it will extend to cover interest if the latter is 
incorporated. The conditions of competitive pro- 
duction will necessarily be exactly reflected in the 
recompense. If interest is an element of production, 
the product of course incorporates it; if it is not, 
then the product cannot have it incorporated. 



DISTRIBUTION OF LIVELIHOOD 91 

in occupying a certain section of soil through 
the medium of the return which it affords to 
his labor upon it, there can be no just basis 
by which he should loan out to another a 
monopolized commodity and receive a prem- 
ium for the gratuity of nature. By which I 
mean to advance the opinion that, if there 
might seem objection to laying too heavy a 
burden upon land where it is worked by the 
owner, there can seem to be no ground for 
such objection where it is not worked by the 
owner, but by a lessee or sub-occupant. In 
such case it can be taxed without the slightest 
scruple, it seems to me, down to the point 
where it has no value beyond the improve- 
ments upon it, which of course fully absorbs 
its rent. 

There might, indeed, be a productive danger 
in burdening the soil too heavily. For if the 
conditions of soil production were made too 
onerous, it would tend to discourage this, the 
basic sinew of the productive organism. It 
would be well, in fact, to encourage to every 
just extent, soil production, for the greater 
the volume of produce brought forth from the 
earth, the greater will be the manufacturing, 



92 DISTRIBUTION OF LIVELIHOOD 

exchange and professional occupations reared 
upon it. And no better means can be initially 
devised for doing this, it would seem, than to 
bring, through the absorption of materialized 
rent, the land under the occupancy of its actual 
owners. For the man who actually owns the 
land he is working will always have a greater 
interest in bringing and keeping it to the 
highest state of productive efficiency than he 
who suboccupies it under whatever conditions. 

The rigid regulation of population here 
called for under certain conditions, will of 
course meet with bitter denunciation from 
some classes, and all, indeed, must deplore the 
necessity for such a condition in human affairs. 
But who can dispassionately survey the situa- 
tion and not come to the conclusion that it is 
far better to hold population in check than to 
suffer the miseries inseparable from its undue 
excess. Four-fifths of human suffering, it is 
safe to say, has its source in the conditions that 
surround the procuration of livelihood. Pass- 
ing by altogether the insufficient sustenance 
and miserable housing of the under classes, 
with the attendant conditions of ignorance, 



DISTRIBUTION OF LIVELIHOOD 93 

viciousness and crime, we find in the ceaseless 
anxiety that harrows the higher orders of the 
working classes, preponderant justification for 
the most drastic preventative. For it is from 
the psychological aspect that human welfare 
must tend to be viewed. With the continuous 
progress of the race to a deepening conscious- 
ness of its environment, and the steady spread 
of that consciousness to all orders of the peo- 
ple, has come the necessity for ameliorating 
and removing the painful features of that en- 
vironment. The primary factor for a con- 
tented mind is that one should be able to pro- 
cure a decent and self-respecting livelihood, 
and be assured that those he brings into the 
world shall have the same privilege. And if 
he remembers that manual labor is the natural 
manner of livelihood procuration, and all other 
is artificial, such a state of mind should not be 
inconsistent with the lowest order of economic 
cooperation, providing always that the con- 
ditions surrounding it are self-respecting, 
meaning by which that it should require no 
relinquishment of manly independence nor 
subject the worker to indignity. But with a 
population in excess of the capacity of the pro- 



94 DISTRIBUTION OF LIVELIHOOD 

ductive organism, in any certain state of devel- 
opment, to maintain, these conditions are im- 
possible. Production, indeed, may be fully 
sufficient to maintain present population; it 
doubtless tends to proportionately augment, 
and may continue to do so for an indefinite 
period. Whether, however, it is actually so or 
not can be determined in but one way, that is, 
by placing the economic organization on a fair 
basis and observing the condition that results. 
If, with the hours of labor restricted until 
wages cease to advance, indicating that the 
third species of labor has reached its fair com- 
parative level, and with rent absorbed into its 
proper channel, namely, to meet the require- 
ments of government, there exist conditions 
of distressful livelihood, then population is 
assuredly excessive at that certain time. 

With population excessive it is exceedingly 
difficult to effect a satisfactory social environ- 
ment. It is difficult to secure for the aged that 
security from want which a kindly compassion 
must accord to all, regardless of the manner 
in which they have conducted their earlier life. 
It is difficult to care for the unfortunates, and, 
what is more to the purpose, to keep their 



DISTRIBUTION OF LIVELIHOOD 95 

numbers down. It is difficult to effect reform 
in the marital institution, where the necessity 
is most immediate. This instituton, as it at 
present exists, permits conditions destructive 
of human weal. Thus if the female party to 
the marital contract finds her peace of mind 
destroyed and desires to withdraw, she is fre- 
quently unable to do so. Either she is unable 
to maintain her children, or she is unwilling to 
separate from them. Consequently she is 
obliged to remain within the contract, and, by 
the birth of more children, is subjected to a 
despairing and hopeless condition. Similarly, 
though with the circumstances considerably 
mitigated, the other party to the contract, find- 
ing his peace of mind gone, is nevertheless 
obliged to support the female throughout her 
lifetime. Relief should be provided for these 
conditions and others of similar nature. The 
woman, desiring to withdraw from this con- 
tract, is entitled, by the most infinitesimal atom 
of justice, to the integrity of her sex until she 
can effect her purpose. The man, likewise, 
should be afforded a fair means of relief. That 
the parties should have voluntarily entered into 
the contract, is of no consequence. No arti- 



96 DISTRIBUTION OF LIVELIHOOD 

ficial condition of life should be hopeless, nor 
should anyone, however voluntarily they might 
have created such a condition, be compelled 
to abide the consequences, No one, for in- 
stance, should be sentenced to lifelong im- 
prisonment. If it is not desired to punish with 
death, then the punishment should contain an 
element of hope in its composition. 

With a large proportion of society immersed 
in a despairing condition of poverty, there is 
little encouragement to proceed with those 
lesser reforms that I have noted, and to which 
others might readily be added, one of them in 
particular being the injustice done to the de- 
pendents of criminals in depriving them of 
their natural support. But that effective 
means will be taken to remove this condition 
seems scarce to be hoped for under the present 
national division of society. With society 
separated into antagonistic units, population is 
the primary necessity of national preservation, 
and the harmonious unity of the civilized world 
seems prerequisite to a high order of economic 
polity and of civilization. 



APPENDIX 

The limited time in which I was compelled to 
write the foregoing essay, obliged me to pass 
rapidly from one principle to another, with no more 
explication than was absolutely essential to their in- 
telligent statement. This, indeed, I was the more 
willling to do, as their connected presentation is 
thereby more clearly defined than would perhaps 
be the case if their detailed operation was in each 
case attempted; but as I look back over the essay 
in passing it to the printer, it occurs to me that 
an informal consideration of some of the main prin- 
ciples involved might prove of service, particularly 
to those general readers who may be without that 
intimate familiarity with economic reasoning that 
a ready understanding of the principles and their 
operation may perhaps require. 

The first livelihood of the first man must have 
been obtained direct from the earth, either in its 
direct products, such as fruits and vegetables, or its 
indirect products, such as animals. Until the ex- 
change of livelihood began under the operation of 
labor division, livelihood, and, therefore, the labor 
which it materializes, could have possessed no esti- 
: ted value: one's labor produced his livelihood, 
I the value of the latter lay in the simple fact 
U_.it it was livelihood. But when the division of 
97 



98 APPENDIX 

labor once began, and an exchange of livelihood 
became necessary, the articles constituting it neces- 
sarily began to take on a comparative value one with 
another, which, with the introduction of money, 
came to be estimated in that common medium, as 
against all the commodities of livelihood. 

The exact manner in which this value might be 
estimated under the simplest condition of society, 
it would be more or less difficult to say, and it 
would be still more difficult to consider all the 
different circumstances that arise under a complex 
condition of society to influence its estimation. 
Probably the first consideration is the comparative 
difficulty of procuration, that is to say, the labor 
involved; and, extending through the ramifications 
of the productive organism, this value, doubtless, 
finally rests in the operation of supply and demand, 
into which principle all minor considerations event- 
ually converge. But, however it may be estimated, 
we are able to see that the value of that fundamental 
labor applied to the soil and which constitutes the 
basis of livelihood, consists of the value of its pro- 
duct, as that product may be estimated in the liveli- 
hood organism. Thus we have the fundamental 
principle of labor value, however that value may be 
changing under the changing conditions of pro- 
duction. 

Now, under the operation of labor division, labor 
comes to be applied away from the soil, but on its 
materials. The value of the latter, in their worked- 
up state, however it is estimated in the productive 



APPENDIX 99 

organism, likewise constitutes the value of the labor 
involved in their production, but unless this labor 
value is equal to what could be procured from un- 
occupied land, it would turn to that land for the 
higher value, the result of which, under the law of 
supply and demand, would be to bring the value of 
the abandoned labor up. If, on the other hand, this 
latter value should be higher, taking into consider- 
ation the qualities involved, than labor value on 
land, this last labor would flow from the land, and 
bring the two values to a comparative level. Thus, 
with the land value in control, these two values in- 
teract upon each other, and hold themselves at a 
comparative level, so long as there is unoccupied 
land available for occupancy, and according to the 
labor value afforded by such unoccupied land. 
For, since labor can always flow from the land 
to the landless employment and prevent that value 
from rising above the comparative values of the 
first, the former value can never exceed the latter; 
but landless labor is prevented by prior occupancy 
from flowing onto occupied land, so that it can 
only gauge its value according to the land that is 
unoccupied. Thus we have the second principle of 
labor value, namely, that it is gauged by the labor 
value conferred by unoccupied land, and, when the 
latter is exhausted, by the competitive process that 
makes it correspond to the value of unoccupied 
land. 

Once again, as land that can be readily occupied 
becomes monopolized, and likewise its materials 



100 APPENDIX 

take on a monopolized condition in that supplies 
can only be obtained by those already possessing 
materials and therefore able to apply the labor and 
thus secure the value to procure supplies of such 
materials, there arises a third order of labor value 
that is estimated by the competition of the labor in- 
volved alone. And since all labor application must 
class into either or all of these three divisions, we 
have before us the entire scheme of labor value. 

That rent is the difference in the varying quality 
of the soil is a current principle of political economy, 
and that it might exist upon even the lowest quality 
of soil I have endeavored to show in the preceding 
essay; likewise I trust I have established, by show- 
ing the manner in which interest must be estimated, 
that the latter represents the comparative difference 
in value between the second and last species of 
labor just considered. 

If labor division did not exist at all, and each 
family secured its livelihood from a certain fixed area 
of soil, it would be very easy to see that, when what 
of the earth's surface would afford a livelihood 
under the condition of production at such time pre- 
vailing was occupied, population could not increase 
without reducing the area assigned to each family, 
and therefore diminishing the volume of livelihood 
permitted to each, and that when this became in- 
sufficient for maintenance, population was exces- 
sive. But when, under labor division, whatever 
population cannot find occupancy on the soil is 



APPENDIX 101 

able to overflow into occupations that exist above 
the soil, so to speak, or what I have termed the 
landless division of production, it is very much 
more difficult to determine when the capacity of the 
productive organism to receive and maintain 
population has been reached. For, though great 
numbers may be lacking employment, there seems 
to be a plentitude of livelihood if they but possessed 
the means of purchasing it. It would seem, under 
these circumstances, that the obvious remedy would 
be to divide up the existing employment so that 
all would have an equal chance in the economic 
organism, and it is a matter of surprise to me that 
this remedy has not been adopted before this, not- 
withstanding all considerations in opposition. It 
is true, indeed, that the hours of labor have tended 
to decrease through the efforts of labor organiza- 
tions, but the underlying motive seems to be a mat- 
ter of securing more comfortable conditions for the 
members, rather than ethic or economic consider- 
ations. Social tendencies also have doubtless ex- 
erted a considerable influence in this direction. 

Complexing the situation, also, is the matter of 
inequitable distribution, for, were distribution on a 
fair basis, it might seem that there would be a 
sufficiency for all. 

In considering the problem of livelihood distri- 
bution, the first thing to be borne in mind is that 
labor application, or a command upon labor applica- 
tion, is prerequisite to any share whatever in the 



102 APPENDIX 

fund of livelihood. If one has no employment, nor 
any command upon the employment of others, he 
cannot possibly share in distribution. The first re- 
quisite, then, of distributive equity, is that each and 
every citizen should be guaranteed employment 
sufficient for maintenance. Now, if there is not 
enough employment to go round, the manifest rem- 
edy is to divide up the existing occupation so that 
everyone may find representation therein and 
possess that fundamental right of life, the ability to 
procure maintenance. 

The next step is to bring distribution to an 
equitable basis; and I have endeavored to show that 
this must be done through the absorption of rent 
in behalf of the general welfare, and the elimination 
of interest by means of the advance of the third 
gradation of labor value. 

When this has been accomplished, guidance must 
be had from the condition of things then prevail- 
ing. If the value of the lower grades of labor ap- 
plication proves to be below the requirements of 
satisfactory maintenance in that state of society, 
then the scope of labor application has become too 
small to secure a value in those grades sufficient in 
volume for proper livelihood. The subdivision of 
labor has, in other words, become too great. 

To those who have not fully grasped the prin- 
ciples set forth in this essay, it may appear that the 
advance of the third gradation of labor value might 
take effect in higher prices for the commodities of 



APPENDIX 103 

livelihood and thus nullify itself so far as any ad- 
vantage to the complaining distributive order is 
concerned. 

The cost of production, which represents the 
factor under consideration, is wholly dominated in 
the estimation of price by the principle of supply 
and demand. It is the latter that first establishes 
price, and it is thereafter only, under a certain con- 
dition, that the value of labor, as incorporated in 
the cost of production, can exert any influence. 
That is to say, supply and demand fixes a price; if 
this price is above the cost of production, plus the 
prevailing rate of interest, productive competition 
sets in, and by changing the ratio of supply and 
demand, reduces the price to the point that will just 
equal these two elements. But when, on the other 
hand, price has settled to this point under a com- 
petitive system of production, then an advance in 
the cost of production comes into contact with the 
great fundamental principle of production, necessity, 
and which has produced, through the desire of the 
competitors to secure the means to satisfy their 
wants, the productive competition just noted. Now, 
there is nothing in the fact of advancing cost of 
production to alter the conditions generating this 
competition, and it must, consequently, proceed as 
before. Changes, indeed, would doubtless take place 
in the personnel of the competitors, owing to the 
readjustment of productive materials because of 
the elimination of interest, but beyond this, no effect 
would be produced. 



104 APPENDIX 

That the advance in the third gradation of labor 
value will produce no increase of prices may, in- 
deed, be deduced from the general principles of 
labor value. Thus, the value conferred by land rests 
in the value of its product, as likewise the value 
conferred by land materials rests in the value of 
these materials when refined into consumable liveli- 
hood; the value of the third species of labor cannot 
possibly rise above the second value, and although 
the latter is able to advance, there is nothing in the 
advance of the third species, so far as the simple 
elimination of interest is concerned, to cause it to 
do so, for at that point the two are simply on their 
fair and proper comparative basis. 

This point of interest absorption, it may be re- 
marked, would mark the exact correspondence of 
then existing population to then existing production, 
as I will presently endeavor to show, and if con- 
ditions of distressful livelihood then were present 
the remedy would be to reduce population and, 
unless the increasing efficiency of labor neutralized 
the labor contraction resulting from such reduction 
of population, lessen the restriction of labor appli- 
cation to the point at which interest would re- 
appear if the increase of labor application continued, 
but no further. In other words, an equitable con- 
dition of labor value does not permit interest, and 
when this has disappeared, there is an exact ad- 
justment of labor application to the requirements 
of the productive organism for labor application, 
as measured by the state of labor efficiency, and if, 



APPENDIX 105 

instead of the means I have noted, it were attempteJ 
to remedy matters by further advancing the value 
of labor, the attempt would not only be ineffectual, 
but would actually intensify the distress. 

For, under a competitive system of production, 
the value of labor is one of the determining factors 
of the intensity of production. If, accordingly, the 
value of the third species of labor application were 
advanced beyond the point of interest absorption, it 
would have to take effect in a dimimshment of pro- 
ductive competition, and therefore in advancing 
prices. For while up to this point the principle of 
necessity that underlies all production would, in con- 
junction with the comparative valuation of the 
second and third species of labor application here- 
tofore described, operate to leave productive com- 
petition unaffected, except as it might alter the per- 
sonnel of the members of the second order, beyond 
there such influence would be overcome, and the 
representatives of the second order of labor would 
be compelled, to conserve their involved materials, 
and, indeed, to receive a proper comparative value 
for their labor application, to either exchange their 
materials for money and transfer themselves into 
the third species of labor, or diminish the intensity 
of their productive competition, which is equivalent 
to saying they would permit prices to advance. 

The effect of this increase in the second grada- 
tion of labor value would immediately be felt on 
those soils just returning the value theretofore pre- 
vailing, and, indeed, which had governed it, and labor 



106 APPENDIX 

application would tend to flow therefrom into the 
field of higher return.. Thus there would be a re- 
striction of production at its base, thereby reducing 
the total volume of livelihood, though there would, 
through the resultant advance in the price of land 
products, be to some extent a reactionary effect. 
The lower plane of livelihood, in the face of higher 
product values, and therefore of higher labor 
value, would appear to be reflected in the inability 
to obtain, because of the greater subdivision of 
labor application, so great a volume of labor value 
as previously, though the ratio of value to the 
amount of labor applied is higher. 

The correspondence between population and pro- 
duction, to which I have just referred, appears to be 
effected through the relation between price and the 
competitive ratio of labor application, as these are 
connected through the modification of the first by 
productive competition, and of the second by la- 
bor efficiency. That is to say, price, as I have just 
pointed out, where it is above the cost of production, 
plus the prevailing rate of interest, tends to be re- 
duced to the aggregate of these factors by produc- 
tive competition; and, labor application, on the other 
side, adjusts itself into this productive competition 
through the medium of the volume of its product. 
Or, reversely, the supply and demand relation of 
labor application under competitive production is 
determined upon the value of the product, which is 
the volume of such multiplied by its price, sp that 
price and labor application meet each other through 



APPENDIX 107 

the tendency of the first to the cost of production, 
and the relation of the competitive ratio of the lat- 
ter to this cost, through the volume of its product, 
and which volume is the measure of its efficiency. 
Where price does not so tend to cost of produc- 
tion, its excess over cost of production ranges into 
rent, for under unrestrained productive competition 
it is only by restriction at the base of supply that 
price can maintain a level above the competitive 
cost of production. * 

I may add, in conclusion, that an equitable con- 
dition of livelihood requires an equitable condition 



* It is scarcely necessary to state that the con- 
tents of this hastily written appendix are offered 
as suggestions simply, and do not pretend to 
certainty. To ascertain their accuracy would, 
however, require a very considerable and complex 
analysis, which I am unable to attempt at this time. 
Moreover, to make this in any way comprehensive 
would involve considerations of the different states 
of a society's upbuilding. Between the developing 
condition of a society and its comparatively de- 
veloped state, that is, when its resources have been 
developed and equipped with the requisite appliances 
in the way of buildings, machinery, highways, 
machines of transportation, and so forth, there is 
required a very different comparative degree of 
labor application. But, as this particular condition 
is represented in the principle of labor efficiency, 
and every other condition that I can conceive of 
comes under the operation of some of the principles 
stated in the second chapter, I leave the details of 
the productive organism, confident that their inves- 
tigation will verify the accuracy of these principles. 



108 APPENDIX 

of labor application. No incubus should rest upon 
any citizen or class, nor should any advantage be 
conferred upon any citizen or class. Any unneces- 
sary condition that makes for unusual difficulty to 
the entrance into any occupation is inequitable, in 
that it prevents the natural flow of labor applica- 
tion thereto, and by thus restricting the supply of 
labor there, unnaturally advances the value of such 
labor over the remaining labor of the society which 
must be exchanged therefor under a system of ex- 
changed livelihood. If, for instance, it is made re- 
quisite to the entrance into any calling, that a cer- 
tain language should be known, or that graduation 
from an educational institution take place, when 
such requirements have no direct bearing on the 
performance of the natural duties of that calling, 
this would operate inequitably by deterring from 
such occupation those who might posses the neces- 
sary ability for its natural duties, but who might not 
possess the artificial qualifications noted. Similarly, 
the limitation of the number of apprentices who 
may enter any particular occupation is an inequit- 
able condition, because it prevents the natural flow 
of labor to that occupation. The restriction of the 
hours of labor in any particular employment beyond 
the general rule prevailing, also tends to unnaturally 
advance the value of that sort of labor, but this 
condition is less inequitable than those just noted, 
because it requires more workers in that calling and 
thereby tends to lessen the competition in other 
occupations. An equitable condition of labor ap- 



APPENDIX 109 

plication requires, however, that all occupations 
should have a common basis of application, so that 

the value of every sort of labor may adjust itself 

in complete equity, under that great principle of 

supply and demand that gauges the comparative 
value of all labor. 



INDUSTRIAL DEPRESSION 

As this little book proceeds to press a sus- 
pension of industrial activity of considerable 
proportions is taking place in this country and 
seems likely to extend; and as this is a con- 
dition liable to constant recurrence in the pro- 
ductive organism, I have decided to offer a 
few hasty ideas on the subject, in the hope 
that they may prove of interest and value. 

Under the operation of the principle of the 
division of labor, production and consumption 
must for all practicable purposes equalize each 
other; production cannot long proceed in ex- 
cess of consumption and must presently con- 
form to such volume, and though, of course, 
consumption cannot take place in excess of 
the possibilities of production, the volume of 
consumption gauges the volume that will be 
produced within these limits. For under a 
system of exchange production, it would be 
utterly absurd and is substantially impossible 
to produce more of a commodity than one 
ill 



112 INDUSTRIAL DEPRESSION 

could use himself, if it could not be exchanged 
for some other commodity, so that there is re- 
quired on both sides of the exchange operation 
a consumptive process equal to the productive 
process. 

Production and consumption come into con- 
junction in the system of exchange by means 
of money. The volume of money, accordingly, 
as it is at any time adjusted to commodity 
prices, represents the consumptive demand, 
and it rests altogether in the movement of this 
money whether this demand shall be active 
or inactive, and whether production shall pro- 
ceed in an active or inactive manner corres- 
pondingly. 

Because of the advantages that accrue to the 
accumulation of money, there is a constant 
tendency on the part of the individual to make 
such accumulation. It tides him over the 
exigencies of life, provides his subsistence in 
old age, affords him leisure when that is de- 
sired, and gives him command over aggrega- 
tions of materials that enables him to exert a 
higher capacity of labor, and therefore to se- 
cure a higher value for his services in the pro- 
ductive organism. 



INDUSTRIAL DEPRESSION 113 

These and other general advantages that 
flow from the accumulation of money are so 
desirable, that it would be injudicious, as well 
as useless, to urge against it; but, because the 
volume of money represents the volume of 
production, in the same way that it likewise 
represents the volume of consumption, equaliz- 
ing as it does the two, and the volume of pro- 
duction represents the labor value of the pro- 
ducers, any such accumulation necessarily rep- 
resents a corresponding diminishment of con- 
sumption as measured against production. 
The consequence is that, when the accumula- 
tion of money has gone on for a sufficient 
length of time, production so much exceeds 
the requirements of consumption that there is 
necessary a retrenchment of productive 
activity to equalize the opposing factors. 
This is aided by the inability, because of 
the diminished volume of labor application, 
cation, to continue their accumulations on so 
large a scale on the part of some, to make any 
saving whatever on the part of others, and the 
necessity, on the part of still others perhaps, 
to draw upon the accumulations of others. In 
time, the surplus livelihood which had gradu- 



114 INDUSTRIAL DEPRESSION 

ally accumulated in correspondence to the ac- 
cumulation of money is consumed, and scope 
is provided for another period of productive 
activity. 

Put differently, production and consumption 
must equalize each other, although the second 
naturally follows somewhat behind the first. 
But because of the advantages accruing to the 
individual by making his consumption less 
than his production, and which, for like motive, 
he endeavors to make as large as possible, there 
tends to accumulate stocks of livelihood in 
excess of the immediate consumptive demand. 
To increase these would be disadvantageous 
and a retrenchment of productive activity is 
necessary until they are reduced. Under the 
diminishment of occupation thereby produced 
there is not only less capacity for consumptive 
demand but a tendency to lessen that rate of 
consumption ordinarily prevailing. Under 
these circumstances business distress frequently 
overtakes many who are carrying on productive 
operations on borrowed means (the accumu- 
lated money above considered) and depending 
on the speedy marketing of their products to 
meet their obligations. Financial distrust and 



INDUSTRIAL DEPRESSION 115 

uncertainty is engendered, and a general hoard- 
ing of money takes place, all of which operates 
to aggravate the situation, and a very general 
condition of distressful livelihood is frequently 
brought about. 

There seems to be but one manner in which 
relief can be afforded to the situation. This 
is to restrict labor application to meet the 
diminished volume of production. The re- 
striction should take place in conformance 
with the diminishment of production, as evi- 
denced in the reduction of occupation, and 
when things began to resume their normal 
state, the restriction should be gradually re- 
moved in like conformance. Employers of 
labor would, of course, be justified in making 
a reduction in remuneration proportionate to 
the reduction of labor given. 

This seems to be the only effective method 
of relief, and it likewise seems to be the proper 
method. The diminishment of livelihood pro- 
duced requires a corresponding lessening of 
the labor application of the society, and it is 
equitable that this should spread over the 
citizenship at large, rather than concentrate, 



116 INDUSTRIAL DEPRESSION 

for the most part, upon those engaged in modes 
of occupation that can be most readily dis- 
posed of. And though the actual restriction of 
labor application takes place within the limits 
of hired labor alone, the diminishment of oc- 
cupation is, of course, spread over labor appli- 
cation in its entirety, for the general decrease 
of production leaves less occupation for all 
classes. 

It seems scarcely necessary to explain that 
a restriction of labor application to meet the 
exigency of diminished production operates 
upon quite a different set of conditions than 
when applied to effect an equitable distribu- 
tion. In the latter case there is a certain 
volume of productive occupation against a cer- 
tain citizenship. Because of the effect of labor 
efficiency, a portion of this citizenship is either 
wholly out of employment, or is insufficiently 
employed for the necessities of maintenance, 
and the scale of remuneration to that portion 
classing in the third species of labor applica- 
tion is below the point of comparative equality. 
Accordingly, a restriction of labor application 
is instituted to adjust matters. It is now quite 
proper for employers of such restricted labor 



INDUSTRIAL DEPRESSION 117 

to attempt to reduce wages by all proper 
means, although their efforts must prove un- 
availing in the face of the operation of the 
powerful principle of supply and demand. 
Upon the basis, in other words, of a certain 
ratio of labor supply and demand, an augmen- 
tation of demand has been produced by the re- 
striction of the hours of labor application, and, 
under the intensity of opposition between the 
two engendered by the conditions of produc- 
tion, certain results are produced. But in the 
first case there has been a reduction of de- 
mand through the diminishment of production, 
while the conditions of supply remain the same. 
It is necessary, accordingly, to restrict the ap- 
plication of labor supply to correspond to the 
decrease of demand in order to have things as 
before. But though the ratio of supply to de- 
mand would be the same as before, the con- 
ditions of production, assuming it to be pro- 
ceeding under an equitable condition of labor 
value, would not permit so intense opposition 
between the two, because the representative 
remuneration could not possibly be afforded 
by the scale of prices against the lessened pro- 
duct, and there would otherwise rather be a 



118 INDUSTRIAL DEPRESSION 

cessation of productive competition and ad- 
vancing prices, with conditions that I have 
heretofore outlined. With, however, supply 
and demand placed in proper proportions, the 
question of remuneration would adjust itself 
automatically and equitably under the great 
principle of necessity that primarily underlies 
the livelihood organism. 

I do not see how a diminishment of produc- 
tion can be necessitated other than by the 
diminishment of consumption, except it be by 
a decrease of the product from the base of 
supply, the soil; but in either case the manner 
of relief would be the same. 



A SUGGESTION ON EDUCATION 

The mass of impractical details that go to 
make the present curriculum of common school 
education, and the very ill-informed condition 
of the student's mind at the end of it, constrain 
me to offer a suggestion on what seems a more 
practical and comprehensive method or study. 

In the first place, owing to the immature 
state of both mind and body of the young, and 
the paramount importance of giving the body 
the fullest opportunity for that physical devel- 
opment so necessary for the strain of life, I 
should, beginning at not too early an age, 
suggest the confinement of study to those 
three studies which form the basis of all edu- 
cation, namely, reading, writing and arith- 
metic, until the student reached an understand- 
ing age, that is, until he became cognizant of 
the connection between cause and effect, and 
began to form some judgment on what he read 
and saw. A course of not too onerous study 
in these three branches, supplemented by a 
generous complement of wholesome sports and 

119 



120 A SUGGESTION ON EDUCATION 

pleasures, should, it seems to me, place the 
child in a position where, at the proper age, 
he would be able to proceed with a more ad- 
vanced course of study. 

For simplicity and effectiveness, it would 
seem that this might proceed from a central 
column of history, if I may so express myself. 
That is to say, I should advocate first a depict- 
ment of society in its savage state, thereafter 
in a more advanced stage, a still more advanced 
stage, its contemporaneous condition, and con- 
cluding with Mr. Buckle's great work on 
English civilization, and which, I judge, is not 
likely to be superseded. 

As this structural course proceeded, such 
practical studies could be added as are neces- 
sary or desirable, and at its completion a series 
of lectures setting forth the central truths of 
economics, sociology, ethics, biology, psychol- 
ogy, etc., could be read. 

Beginning thus upon the three R's, the 
student would gradually rise to higher and 
more comprehensive views of the course of 
human activity and environment and its 
motives, and would then, by means of the 



A SUGGESTION ON EDUCATION 121 

lectures indicated, grasp the structure of the 
whole field of knowledge. 

Thus he would possess a point of educational 
vantage that would place him on terms of 
equality with the most favored classes, except 
as the possession of wealth would enable the 
latter to amplify or fill in the framework 
already described, and this, I think it will 
hardly be questioned, is an equitable attribute 
of wealth and one of the objects for which it 
is sought. 

It seems to me that if details were avoided, 
and impractical subjects eliminated, the 
student could reach this point without undue 
mental exertion by the time that he must take 
up life upon his own account. 

If this view is correct, every citizen might 
be in possession of this educational framework 
-before entering the arena of livelihood procura- 
tion and be able to plan his future in a fairly 
intelligent manner, which he is totally unable 
to do as he emerges from the public schools of 
the present time. No one can possibly plan 
his future intelligently without a view of the 
world's accumulation of knowledge in its 
entirety. To acquire this on any extensive 



122 A SUGGESTION ON EDUCATION 

scale in detail is altogether impossible, and 
would be, for the average citizen, as unneces- 
sary as it is impossible, but that a compre- 
hensive understanding of its structural features 
may be readily acquired by the average 
student, and is quite essential for his guidance 
and for the fullness of life, seems not to admit 
of doubt. 



THE NEGRO 

I should like to offer my views on what is 
called the Negro Problem of the United 
States. 

This presents itself to me in two aspects: 
that the United States must contain a separate 
race of blacks, or must assimilate that race 
into its white citizenship. 

From this standpoint, the question seems 
to be one of expediency, and it is to be deter- 
mined whether either of these conditions, or 
a combination of both, is desirable to the wel- 
fare of the United States. 

I need not, I presume, enter into a discus- 
sion to show the inexpediency of two separate 
races within one nation, and whose interests 
must in the nature of things come into fre- 
quent conflict to the detriment of the har- 
monious workings of that nation. If, there- 
fore, the two races could not be united, the 
matter would be at once decided by that fact. 
But as their union is now taking place on a 
considerable scale, upon whatever basis, the 

123 



124 THE NEGRO 

question resolves itself into the expediency of 
the union of the two races. 

The history of humanity, and of the uni- 
verse, converges into one principle, that of de- 
velopment. So far as civilization is concerned, 
this confines itself to the development, of the 
mind, for it is only as the mind or character 
of the individual attains the qualities requisite 
for civilized society that the latter is possible. 

These qualities are many and varied, em- 
bracing industry, sobriety, self-respect, justice, 
forbearance, self-control, self-sacrifice, am- 
bition, and so forth, and are only acquired and 
preserved under civilized forms of society. 
They are transmitted from generation to gen- 
eration under the operation of heredity, prob- 
ably by bequeathing a formation of brain that 
conduces to these qualities. 

The development of the mind of the Ameri- 
can is coincident with the history of the con- 
tinent of Europe. This, for so long as there 
is any record, has been a continuous struggle 
toward the principles of civilization, resulting 
in that state of society existing at the present 
time. 



THE NEGRO 125 

The mind of the negro is environed in the 
history of Africa. So far back as there is any 
record, there has been no civilization nor at- 
tempt at civilization over the greater part of 
that continent, and savagery has entirely pre- 
vailed. 

A comparison of the history of these two 
continents with respect to the development 
of the mind indicates that the mind of the 
American is many thousands of years in 
advance of the mind of the negro for the pur- 
poses of civilization, and the conclusion must 
be, therefore, that it would be inexpedient for 
the former to unite with the latter, and that 
it is the duty of the United States to take 
measures accordingly. 



THE END. 



MAY 30 1908 



J 



